South Korea has introduced new supervisory fees for cryptocurrency exchanges. These regulations have affected major players like Upbit and Bithumb. Starting next year, these exchanges will need to pay these fees as part of updated regulations announced by the Financial Services Commission on July 1. The new rules are part of the revised ‘Enforcement Decree of the Act on the Establishment of the Financial Services Commission’ and the ‘Regulations on the Collection of Financial Institution Contributions’.
According to the new rules, the virtual asset operators have to pay supervisory fees for the inspection by FSS. The combined fee for the top four exchanges is expected to be roughly 300 million won ($220,000). Out of this amount, Upbit, which is the largest exchange, is expected to account for over 90% and will be approximately 272 million won ($199,592).
Bithumb will pay about 21.14 million won ($155,157). While Coinone and GOPAX will contribute around 6.03 million won ($4,422) and 830,000 won ($608) respectively. Korbit is excluded from these fees due to its lower revenue.
These fees will create a form of quasi-tax for financial institutions that go through FSS inspections. The payment is mandatory for any business which has operating revenue of 3 billion won or more. This is much faster compared to previous industries, indicative of the fast-growing crypto market and surging regulatory scrutiny.
New Law Mandates 80% of Crypto Assets in Cold Wallets in South Korea
The short implementation phase was a source of surprise for insiders who expected a longer period. While bigger exchanges like Upbit and Bithumb can absorb these costs, it may pose additional challenges to exchanges like Coinone and GOPAX that are currently financially struggling. These fees come at a time when South Korean exchanges are experiencing a 30% decline in trading volumes.
The new law also provides requirements on exchanges to store at least 80% of users’ assets in cold wallets. They will also make sure that these assets are not mixed with company funds. These exchanges also must review the listed asset and ensure that it meets the current standards or risk delisting.
This update follows a delay in the implementation of a 20% crypto gains tax by South Korea’s Ministry of Economy and Finance, which may be postponed until 2028.
