OKEx Korea has announced that it will shut down in April and has requested its users to withdraw their holding by April the 7th.
The company has been operating in a market in which Bithumb and Upbit completely dominate. Yesterday, OKEx processed only $1.3 million in trading volume – meanwhile, Bithumb processed $2.1 billion and Upbit $12 billion.
The Act Takes Another Victim
OKEx Korea, just like many other small local exchanges, had managed to survive via order book sharing with international exchanges. But now, the revised Financial Transactions Reports Act makes this impossible, stating: “Cryptoasset providers may not allow customers to trade with the customers of other crypto asset providers through alliances.”
This Act had already claimed a victim several months ago, in December, when Binance Korea was forced to close its doors for good – eight months after it was launched.
The Act also asks exchanges to set up real-name verification for all deposits and withdrawals with an approved bank, which can be a big challenge for many small exchanges. A spokesperson for OKEx Korea declared: “Up until now we’ve provided most of our services with fiat on-ramps, but forming a bank partnership for real-name accounts is realistically out of reach.”
The spokesperson also added that “We struggled to get the Information Security Management System certificate and virtual account [which is a bank account exchanges now require to operate]. As a joint venture company with OKEx.com, it was hard to decide, but we had no other option.”
After taking into consideration all of the changes that would need to take place for OKEx Korea to comply with the Act, it was decided that it wouldn’t be feasible: “In addition to several other factors, actual profits from our Korean operation don’t add up to much, so we decided to cut our losses.”
Currently, people are keeping an eye on Huobi Korea, which is now the only local branch of a global exchange that continues to operate in Korea, now that Binance and OKEx have left. But, unlike those two names, Huobi Korea actually has a lot of success and is registering a higher trading volume – just yesterday it processed $123 million.