Deadline for registration at South Korean cryptocurrency exchanges is approaching, risking $2.6 billion evaporation and triggering a run on withdrawals.

The deadline for registration of cryptocurrency exchanges in South Korea is approaching on September 24th. According to reports, two-thirds of the 60 exchanges have yet to register, leading experts to believe that this may cause a "bank run" situation.

The "Financial Transactions Reporting Act" in South Korea requires all cryptocurrency exchanges to register with the Financial Services Commission (FSC) by the end of this month. The FSC suggests that exchanges unable to fulfill regulatory obligations must notify their customers of potential closure by September 17 to prevent a bank run when most customers try to withdraw funds fearing the institution's disappearance.

Experts warn that in some worst-case scenarios, financial institutions' reserve funds may not cover the cost of customer withdrawals, a situation that could occur in small cryptocurrency exchanges.

Around 90% of cryptocurrency trading in South Korea is conducted through altcoins, some of which are referred to as "kimchi coins." Kimchi coins are tokens primarily developed by Koreans. According to Kim Hyoung-joong, head of the Cryptocurrency Research Center at Korea University, approximately 42 kimchi tokens may disappear.

Bitfront, a subsidiary of Japanese tech giant LINE and a cryptocurrency exchange, is expected to cease Korean language services and Korean credit card payments on Tuesday. Last month, Binance stopped Korean won trading pairs and payment options, aiming to proactively comply with local regulations.

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