Binance Korea Ceases Operations Just 9 Months After Launch
Binance Korea, a Binance platform specifically dedicated to South Korean residents, will end operations next month. A closure that comes only 9 months after the launch of the platform.
Binance Leaves The South Korean Market
Binance Korea, made the announcement in a press release today. Registrations and deposits of funds are already closed, and withdrawals will be possible until January 29, 2021.
The platform claimed to have difficulty operating due to lack of liquidity and low volume of transactions. Binance Korea used Binance Cloud technology, allowing it to leverage the functionality of the main platform. In this way, the two entities shared the same liquidity and order books.
However, a new law soon to come into force in South Korea stipulates that one exchange cannot share its markets with another. It is rather surprising that Binance was not able to take a major share in the South Korean market. The exchange has significant resources against its competitors and has been successful in creating new markets globally.
The closure of Binance Korea comes 9 months after its launch in March. In addition, Binance had launched a parallel stablecoin BKRW backed by the Korean Won. Binance revealed that the stablecoin will cease functioning by January and all trading pairs will be removed on all platforms.
Will More Exchanges Follow Suit?
Binance is not the only exchange to have an office in South Korea. Other behemoths like OKEx and Huobi have also taken up residence in this market with dedicated platforms. At the moment, it is difficult to determine whether these platforms are threatened in any way to leave. Nevertheless, regulations in South Korea are tightening up and platforms have less room to manoeuvre.
From March 2021, the trading of anonymous cryptocurrencies in South Korea will be prohibited. Exchanges will no longer be allowed to support Monero (XMR), Zcash (ZEC) and Dash among others. While liquidity is already quite low on a majority of these platforms causing some to shut down. This could lead to a migration of users fond of privacy coins to other platforms.