South Korean Crypto Exchanges Face New 6 Billion Won Annual Supervision Fee

South Korean cryptocurrency exchanges are facing a new annual supervision fee of approximately 6 billion won starting next year, following the implementation of the Virtual Asset User Protection Act. The Financial Supervisory Service (FSS) has set the fee rate at 0.5% of operating revenue, which is higher than the industry’s initial expectation of 0.02%. This fee is part of the FSS’s role in supervising and inspecting financial entities, now including virtual asset operators. The industry is reportedly upset about this unexpected financial burden.

South Korean cryptocurrency exchanges are protesting the newly imposed 0.5% supervision fee, arguing it’s disproportionately high compared to other financial sectors. For context, securities firms pay 0.036%, fintech companies pay 0.017%, and banks pay 0.004%. The Financial Supervisory Service (FSS) justifies the higher rate, citing increased manpower needs for crypto supervision. However, the crypto industry argues that their total operating income is much lower than traditional banks. They also point out that only a few large exchanges can afford the fee, and the 6 billion won cost is excessive for the industry’s size. The FSS is currently seeking stakeholder opinions on the proposed fee structure until next month. Crypto industry representatives are calling for a rate that better reflects their business conditions.

Read More: Investor Wins Landmark $100M Case Against Upbit Over Delayed Crypto Transfer Before Luna Crash