South Korea’s Financial Services Commission is strengthening its regulations for cryptocurrency exchanges, in an effort to fight illegal monetary transactions, such as money laundering. The FSC mainly requires crypto exchanges to coordinate with local banks and create real-name bank accounts for their investors, and under the revised Special Financial Transaction Information Act, they must obtain ISMS certification to attest that they meet IT and data protection standards and are integrated with local banks, in terms of the real name requirements.

All crypto exchanges in South Korea that fail to comply with the given regulations are required to stop providing services right away. They are advised to give at least one week’s notice to their respective clients before the deadline. Those who are going to shut down their operations must submit proof that they have done so. Any exchange that continues to operate without adhering to the legal registration requirements will face five years imprisonment or a fine of up to $43,500.

As the deadline for registration of crypto exchanges comes close, many local exchanges are failing to meet the required conditions, and as a result, nearly 40 crypto exchanges will shut down operations by September 24. This move will eradicate “kimchi coins,” which are an alternative digital assets available on local crypto exchanges and usually traded with the Korean won.

As a result of this announcement, those coins that are denominated with the Korean won will be removed. This news is having an ongoing effect on the crypto price, as the Korean won is the third most used fiat currency when it comes to crypto trading, which means that a lot of transaction volume is going to be hit.

On the other hand, the country’s top 4 exchanges, that dominated over 90% of the country’s trading transactions, Upbit, Korbit, Bithumb and Coinone, have reportedly met the regulatory standards set out by the FSC, and will continue their operations after the deadline.