Binance Korea to Improve KYC/AML Framework With Coinfirm’s Compliance Solution
- Binance South Korea unveiled a unique partnership with Blockchain analytics firm, Coinfirm that will help Binance remain compliant with the strict AML framework in the jurisdiction.
- Coinfirm will offer real-time monitoring and flag any transactions deemed illegal on the Binance South Korea platform.
News has emerged regarding a strategic partnership between South Korean Chapter of Crypto exchange – Binance and Coinfirm. Coinfirm will assist Binance in flagging transactions that are deemed suspicious.
The strategic partnership was a last-ditch effort by Binance to remain compliant with the Anti Money Laundering (AML) framework set out by South Korean authorities. This was after the introduction of regulations by the country's financial watchdogs aimed to align with the standard requirements stipulated by the Financial Action Task Force (FATF) Travel Rule.
Binance's leading platform opts for a rather conservative approach that allows them to be lax with the AML and CTF regulations. They instead prefer open but separate affiliate chapters in Jurisdictions that have a harsher stance towards compliance concerning AML/CTF requirements. Examples are such as Binance US and South Korea.
Coinfirm's Progress In Blockchain Regulations
Founded in 2016, Coinfirm works with crypto firms and exchanges to provide expertise real-time Blockchain Analytics and compliance with risk management solutions. They have previously worked with several banks and crypto firms, including CoinGecko and Ripple, in a bid to offer compliance solutions to the FATF guidelines.
Late last year, they worked with Kroll to launch ReclaimCrypto. This initiative uses forensic tech to try and recoup pilfered cryptocurrencies charging 30% for their efforts, while the rest of the recovered crypto would be handed over to respective owners.
How the partnership will affect their customer base is unknown. This is because of the real-time method of screening transactions. Coinfirm Cofounder, Grant Blaisdell, has reiterated that it would be Binance's obligation to act on the flagged transaction as Coinfirm will just provide the data from analytics carried out.
South Korea AML/CTF Stance
South Korea has been on the lookout for illicit transactions while implementing strict guidelines for crypto operations in the country. This is after an Anti-Money Laundering Annual Report indicated that more than half a million dollars worth of crypto transactions in South Korea were declared suspicious and more often than not funneled funds to sponsor illicit activities.
This led to the implementation of stringent rules on crypto participation, including verification of real names in the KYC protocols introduced in 2018 by the Financial Services Commission (FSC).
Notably, Binance was called out on money embezzlement claims in South Korea. This involved $1 million in frozen assets from a client's account, which Binance revealed was at the authorities' behest. The South Korean Ministry of Strategy and Finance has recently proposed that all crypto-fiat transactions and revenue generated from ICO's and token sales are subjected to taxation.