Binance subsidiary in Korea is shutting down, barely eight months since it launched. The exchange cited low trading volume as the reason for the shutdown. It follows Binance Jersey and Binance Uganda which have shut down in the past year.
Binance Korea launched in April 2020, offering its users in the East Asian nation a crypto-to-crypto trading platform. Upon launch, the cryptocurrency exchange supported Binance KRW (BKRW), a native stablecoin backed by the South Korean won. To launch the platform, Binance acquired BxB, a local fintech company which was behind the launch of KRWb, the world’s first stablecoin backed by the Korean won.
Now, eight months later, the exchange is shutting down. In a notice on its website, Binance revealed that it had disabled new registrations starting December 24. The exchange will cease all trading on January 8, with withdrawals set to cease on January 29. Those who fail to adhere to these set deadlines stand the risk of losing their digital currencies, the exchange warned.
The Binance team claimed that low trading volume and limited liquidity were the reason for the shutdown. However, the exchange would continue to offer innovative products to Koreans, Binance Korea CEO Jiho Kang claimed.
He stated, “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 “looking for ways to improve and provide the best services for users including our KR community.”
However, according to some local outlets, a new law that’s set to take effect on March 25, 2021, may be the real reason for the shutdown. The law, which is part of the Special Reporting Act, bars exchanges from sharing order books.
Binance Korea has been relying on the global order book of its parent company to offer its users liquidity. With this law, this will now be illegal, strangling the local subsidiary.
The latest shutdown follows similar moves by Binance Jersey and Binance Uganda which both shut down in the past three months. In both instances, Zhao claimed that his exchange was restructuring to become more efficient and profitable.