In South Korea, the Korean Blockchain Association (KBA) has approved 12 cryptocurrency exchanges as having taken sufficient security measures and implemented robust enough internal management systems to operate as exchanges. This decision is expected to lead to an influx of capital but has also been met with some criticism.
The KBA is an institution that is dedicated to supervising the country’s growing blockchain and cryptocurrency sector. In May of this year, the KBA announced that it would conduct in-house ”self-inspections” of cryptocurrency industry actors.
The Korea Blockchain Association then reportedly authorized third-party actors to administer the inspections. Now, it would appear that all 12 of the exchanges that were audited passed the KBA’s inspection standards, and thereby comply with the KBA’s ”general standards”.
These standards included ”minimum total assets, adoption of a cold wallet, anti-money laundering requirements” and more. Initially, 14 cryptocurrency exchanges were set to be reviewed, but both Sunny7 and Kommit withdrew from the voluntary KBA-led inspections.
More specifically, the exchanges that have been green-lit by the KBA include UPbit, Bithumb, OKCoin Korea, Korbit, Coinone, CoinZest, CPDAXX, HanbitKor, DexKor, NeoFrame, and Huobi Korea.
This affirmation is important, as cryptocurrency exchanges have been in limbo as of late. This follows South Korea’s decision to officially regulate and legitimize the cryptocurrency market, as previously reported by Toshi Times.
South Korean news publications have reportedly predicted that this announcement is expected to bring a flood of new capital rushing into the cryptocurrency market, as it settles some of the uncertainty that has surrounded South Korean cryptocurrency exchanges as they are to be regulated as financial institutions.
However, it is important to note that some have objected to the KBA’s approval. This is mainly due to the fact that Bithumb, which suffered a highly publicized hack of some $40 million worth of cryptocurrency, was included on the list of approved exchanges.
This has led some to question the validity of the methods used to examine the cryptocurrency exchanges. The fact that the Korea Herald revealed that none of the inspections included any form of hacking simulation, and merely involved interviews at the different cryptocurrency exchanges, has added further grist to the mill of those questioning the inspections.
Nonetheless, the KBA has not released any details about the inspections nor what potential shortcomings they identified. Presumably, this has been done as not to reveal any flaws or weaknesses that could have been taken advantage of by hackers.
The head of the KBA’s inspection committee also commented on the findings, stating that ”this inspection does not guarantee the absolute security of the 12 exchanges”, and that it is akin to a driver’s license – meaning ”it is hard to tell whether [the exchanges] are good drivers or not”.
However, the approval of the 12 exchanges should be viewed as evidence that South Korean authorities are indeed making strides toward legitimizing the cryptocurrency market, and is looking to facilitate the healthy growth of cryptocurrency-related ventures.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.