South Korean cryptocurrency exchange Huobi Korea has declared the cessation of its operations, effective January 29, 2024.
The decision, attributed to a challenging business environment, follows a series of moves by other South Korean exchanges like Cashierest and Coinbit, which closed in November, and CoreDAX, which suspended trading due to financial difficulties.
Despite undergoing brand renewal and system upgrades, Huobi Korea has decided to withdraw from providing virtual asset exchange services. The country’s crypto market is now largely dominated by Upbit, Bithumb, Coinone, Korbit, and Gopax, holding 99.6% of the total trading volume.
Stringent regulations, implemented through a 2021 amendment, require exchanges to partner with local banks for fiat-to-crypto services. Huobi Korea and other smaller exchanges failed to secure such partnerships, limiting them to crypto-to-crypto services.
The upcoming Virtual Asset Investor Protection Act, anticipated in July 2024, is set to impose additional responsibilities on exchanges, mandating the maintenance of 80% of user funds in cold wallets and requiring insurance coverage for user compensation in case of hacking or system failures.
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