Binance crypto exchange announced the closure of the Binance Korea division for users from South Korea.
Binance Korea's December 24 post said the closure was due to low transaction volumes. The platform is shutting down just eight months after launching in April 2020.
Binance's Korean subsidiary used the main platform to get liquidity, however, the new law in South Korea prohibits order book sharing. “It is prohibited to allow clients to trade virtual assets with clients of other virtual asset operators through partnerships with other virtual asset operators,” the law says, which will take effect on March 25, 2021.
Binance Korea did not explicitly cite the law as the reason for the closure, but noted that the platform would be "difficult to provide good liquidity."
On Thursday, the platform stopped accepting deposits. The exchange will stop trading on January 8, and withdrawals will be available until January 29, 2021.
To launch Binance Korea, the exchange acquired the Korean fintech company BxB. Binance Korea CEO Jiho Kang said, "We plan to revise our strategies based on the current market situation." He added that the exchange would strive "to strike a balance between providing reliable services and offering while ensuring compliance with regulatory requirements."
Binance CEO Changpeng Zhao said, "We will continue to look for ways to provide better services to users, including our Korean community."
Competitors Binance, Huobi, and OKEx also own local exchanges in Korea. It is not yet known if they will follow Binance's lead and shut down their platforms in the country.