South Korea’s New Crypto Fees Hit Upbit, Bithumb and Coinone

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As a seasoned researcher with a keen interest in the dynamic world of finance and technology, I find these regulatory changes in South Korea particularly intriguing. Having closely followed the rapid growth and evolution of the cryptocurrency market over the past few years, it’s refreshing to see such decisive steps towards regulation that aim to protect users while promoting fair practices.

Starting from next year, significant cryptocurrency exchanges in South Korea, such as Upbit, Bithumb, Coinone, and more, will be obligated to pay regulatory fees under the new Virtual Asset User Protection Act. The total amount of these fees is estimated to be roughly 300 million won, which is equivalent to approximately $220,000.

Starting from January, this newly enacted law requires virtual asset service providers to make contributions proportional to their earnings from the preceding year.

Beginning on July 1st, the Financial Services Commission (FSC) implemented updated rules, mandating virtual asset companies to submit to reviews by the Financial Supervisory Service (FSS) and pay regulatory fees as per local media outlets’ reports.

As a crypto investor, I’ve recently come across some significant changes in the regulatory landscape. These updates involve the ‘Enforcement Decree of the Act on the Establishment of the Financial Services Commission,’ which sets new rules for financial oversight, and an update to the ‘Regulations on the Collection of Financial Institution Contributions,’ affecting how contributions are collected from financial institutions.

According to the financial reports from Dunamu, Upbit is projected to pay approximately 272 million Korean Won (equivalent to $199,592) in fees. Similarly, Bithumb’s estimated fee amounts to around 21.14 million Korean Won ($155,157).

It’s projected that Coinone and GOPAX will pay approximately 6.03 million won (equivalent to $4,422) and 830,000 won ($608) respectively. On the other hand, Korbit is not required to pay these fees because of its lower income generated from operations.

1. This pricing model mirrors fees typically found in conventional banks, reflecting its compatibility with established financial sectors. The quick adoption is primarily due to the burgeoning digital currency market and an effort to eliminate unjust business tactics.

Earlier, financial companies using electronic platforms and Peer-to-Peer lending services would stretch their fees over a period of three years. However, cryptocurrency operators encounter a more rapid repayment schedule.

In contrast to other exchanges such as Coinone and GOPAX, which are grappling with financial difficulties due to the new fees, Upbit and Bithumb appear to be more resilient in handling expenses, given that they’re experiencing a 30% decline in trading volumes.

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2024-08-01 11:19