South Korea’s Financial Services Commission (FSC) has just submitted a new proposal aimed at banning cross-trading on crypto exchanges, local publication Newsis has reported.
If the measure, which is part of a series of amendments to the country’s Act on the Reporting and Use of Certain Financial Transaction Information, is approved, crypto trading platforms in South Korea will not be able to convert the fees they receive to fiat money.
Cross trades involve offsetting buy and sell the same asset (at the same price) without the need to record the transaction in the order book.
The implementation of this prohibition would result in exchanges losing a large amount of funds, as these types of transactions provide them with a large revenue stream.
Thus, the fees they earn in cryptocurrencies cannot be converted to Korean won (KRW).
As a result, exchanges will have no choice but to create a new business to convert trading fees into fiat money.