Binance’s subsidiary in Korea has been shut down, barely eight months since its launch. The exchange referred to low trading volume as the reason for the shutdown. It follows that Binance Jersey and Binance Uganda have been shut down in the last year.
Binance Korea launched a crypto-to-crypto trading platform in April 2020 offering its users in the East Asian nation. Upon launch, the cryptocurrency exchange supported Binance KRW (BKRW), a South Korean-backed native stablecoin. To launch the platform, Binance acquired BxB, a local Fintech company that was behind the launch of KRWb, the first stablecoin in the world to be backed by Korea.
Now, eight months later, the exchange is going to close.On its website, Binance revealed that new registrations had been disabled since 24 December. The exchange will cease all trading on 8 January, with the withdrawals scheduled to cease on 29 January. Those who fail to comply with these set deadlines are at risk of losing their digital currencies, the exchange warned.
The Binance team argued that low trading volume and limited liquidity were the reason for the shutdown. However, the exchange would continue to offer innovative products to the Koreans, said Jiho Kang, CEO of Binance Korea.
He said, “The crypto community and Binance users in Korea remain an important focus for us, and we plan to reassess our strategies based on the current market situation. Our reassessment for the market will aim to find a balance between providing robust services and offerings to users while ensuring compliance with regulatory requirements.”
Binance CEO and founder Changpeng Zhao said the exchange will continue to “seek ways to improve and deliver the best services to users, including our KR community.”
However, according to some local outlets, a new law that is to come into force on 25 March 2021 may be the real reason for the shutdown. The law, which is part of the Special Reporting Act, prohibits the sharing of order books.
Binance Korea has relied on its parent company’s global order book to provide liquidity to its users. With this law, this is now going to be illegal, strangling the local subsidiary.
The recent shutdown follows similar moves by Binance Jersey and Binance Uganda, both of which have been shut down over the past three months. In both cases, Zhao claimed that his exchange was restructuring in order to become more efficient and more profitable.
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