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Amidst the surge of many altcoins (altcoin-season), the Korea Federation of Banks has raised alarm its trading volumes across exchanges in the country.
The KFB reportedly has concerns about potential risks of these exchanges being overexposed to altcoins in relation to banks providing them account services.
Per a report in the The Korea Herald on Monday, the KFB is suggesting its member banks to perform an audit on the altcoins offered by their crypto exchange clients.
An official of the banking association was quoted saying:
“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.”
Crypto traders in South Korea have shifted towards altcoins this year, coinciding with a dip in Bitcoin trading activity.
Bitcoin trading on three of South Korea’s largest crypto exchanges, Upbit, Coinone and Bithumb, is less than 5% of total trading activity. This is significantly lower than the average across major exchanges like Binance, Coinbase or FTX. All offer over 150 altcoins to their customers.
As per CoinMarketCap data, only Coinone has Bitcoin trading topping its activity with a 19.3% share in the last 24-hour period. During the same period Bitcoin trading on Upbit was at 5% with Dogecoin occuptying the number one spot with almost 20%.
In South Korea, banks are obliged to maintain strict oversight over their cryptocurrency exchange clients. Altcoin trading therefore is considered a risk with regards to comes to anti-money laundering efforts, hence the warning.
South Korean trading activity is another indication in support of the alt season market cycle. Ethereum is making big strides and chasing Bitcoin’s market capitalization which is now at its lowest level since July 2018.