South Korea’s banking physique needs crypto exchanges to be cautious of the dangers of being overexposed to altcoins.
The Korea Federation of Banks has raised alarm over the rise in altcoin buying and selling volumes throughout crypto exchanges within the nation.
In response to a report by The Korea Herald on Monday, the banking affiliation has requested member banks to conduct an audit on the altcoins being provided by their crypto trade purchasers.
The KFB is reportedly involved in regards to the potential dangers of banks offering account providers to exchanges overexposed to altcoins.
An official of the banking affiliation quoted by The Korea Herald defined:
“One of many standards that we advocate is the security of digital belongings and that may be measured by the variety of digital cash on an trade. If an trade offers with too many digital belongings, it takes on extra dangers.”
As beforehand reported by Cointelegraph, there was a noticeable pivot by crypto merchants in South Korea towards altcoins. This shift coincided with a corresponding dip in Bitcoin (BTC) buying and selling exercise that had characterised the sooner a part of the 12 months, even resulting in the collapse of the Kimchi premium.
Three of South Korea’s “Large 4” crypto exchanges — Upbit, Coinone and Bithumb — every record over 150 altcoins on their platforms. The KFB’s advice comes as BTC buying and selling on these exchanges accounted for lower than 5%, far decrease than the typical throughout different main exchanges like Coinbase and Binance.
Certainly, as of the time of writing, solely Coinone has Bitcoin buying and selling exercise occupying the highest two positions within the final 24-hour interval. Information from CoinMarketCap reveals BTC buying and selling on Upbit and Bithumb at 4.15% and 9.13%, respectively.
Beneath South Korea’s real-name crypto buying and selling paradigm, the onus is on banks to keep up strict oversight over their cryptocurrency trade purchasers, therefore the explanation for the KFB’s warning. The banking affiliation additionally needs its members to pay attention to the potential cash laundering dangers that may very well be related to the present altcoin buying and selling explosion.
South Korea’s altcoin buying and selling surge is one more piece of proof in assist of the alt season market cycle narrative. Certainly, Bitcoin’s market capitalization dominance continues to say no and is now at its lowest stage since July 2018.
A number of main altcoins have set new all-time highs, with Ether (ETH) breaking the $4,000 milestone to ship over 450% in year-to-date features.