Speaking at the Deconomy Conference 2018 on April 3 and 4, the heads of various South Korean cryptocurrency exchanges came together to discuss the rise of the “cryptoeconomy” in the country, and how they see it moving further keeping regarding regulations and other concerns.
Crypto Market Amidst A Huge Correction
In the words of Jun Haeng Lee: “It was a fantastic year in 2017. The market is very, very speculative .” Lee is the founder of Gopax, a South Korea Cryptocurrency Exchange
While simple, the statement accurately sums up the previous year for alt currencies in South Korea. In the last year, the crypto trading volume in this region as exceeded expectations and edged ahead of global rivals when it comes to 24-hour trading volume.
On the domestic level, the crypto market has gone through its largest-ever correction, amidst tight measures of ICOs and higher scrutiny from financial watchdogs.
Last year, where the total capitalization of cryptos saw its all-time high, an astronomical figure of $800 billion, it came crashing down to just below $300 billion within three months in 2018.
At Deconomy, a conference tipped to be the largest held, the ones assembled believed that the recent development was correctly described as a “healthy correction,” with representatives like Gopax, Coinone, and Korbit, from the Korean exchange, showing optimism during sessions that helped discuss and learn about ensuring a healthier market. Tony Lyu, C.E.O of Korbit, said:
“We need to create a healthy market first. If exchanges can’t do that on our own, we will have to turn to the government.”
ICO Regulation Need
The topic of issuing custom tokens by startups for fundraising was a sensitive and highly criticized practice. The panel expressed that the ICO market ought to be allowed to operate, given that regulations are in place.
“Many ICOs are still looking for interests in South Korea – with operators from the country but registration in overseas – and wishing to list their tokens in Korean exchanges,” said Lee.
Through robust vetting methods, local exchange operators are strengthening their efforts in keeping a check on the ICO drive. Investors do not have enough information or data to back their investments up, so the exchanges take it on themselves to list the most credible projects.
KYC Implementation Necessary
All the panelists used different approaches while dealing with the subject of KYC verifications, of which forms an integral mandate for banks and governments while dealing with money.
Gopax’s Lee said all users of his platform’s users are required to complete the KYC process before they can start trading of digital assets. This confirmation is done to comply with the FSC’s regulations fully.
Compared to this, Coinone’s Myunghun Cha revealed that only 20 to 30 percent of the exchange’s users successfully uploaded the required KYC, as they transact with only one South Korean bank currently.
Finally, Korbit is looking into stricter KYC verification processes. This step is to prevent any regulatory hiccups with legal bodies further. Contrary to popular wisdom, Korbit’s Lyu believes that the only way forward for his company and the industry as a whole is after they properly collaborate with traditional banks and adhere to the country’s regulations.