The Korea Federation of Banks has raised alarm over the rise in altcoin trading volumes throughout crypto exchanges within the nation.
In accordance with a report by The Korea Herald on Monday, the banking association has requested member banks to conduct an audit on the altcoins being supplied by their crypto change shoppers.
The KFB is reportedly involved concerning the potential dangers of banks offering account providers to exchanges overexposed to altcoins.
An official of the banking association quoted by The Korea Herald defined:
“One of the criteria that we recommend is the safety of digital assets and that can be measured by the number of digital coins on an exchange. If an exchange deals with too many digital assets, it takes on more risks.”
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) trading 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 “Big Four” crypto exchanges — Upbit, Coinone and Bithumb — every record over 150 altcoins on their platforms. The KFB’s advice comes as BTC trading 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 trading exercise occupying the highest two positions within the final 24-hour interval. Knowledge from CoinMarketCap exhibits BTC trading on Upbit and Bithumb at 4.15% and 9.13%, respectively.
Beneath South Korea’s real-name crypto trading paradigm, the onus is on banks to take care of strict oversight over their cryptocurrency change shoppers, therefore the explanation for the KFB’s warning. The banking association additionally needs its members to pay attention to the potential cash laundering dangers that might be related to the present altcoin trading explosion.
South Korea’s altcoin trading surge is yet 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 degree 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 beneficial properties.