South Korea Revises Penalties to Strengthen KYC/AML Compliance Across Crypto Exchanges
The laws will come into effect on March 25, a statement reads.
- South Korean financial authorities introduce new penalty standards for virtual asset providers with lax KYC/AML compliance structures.
In a statement released on Wednesday, South Korea’s Financial Service Commission (FSC) announced updated penalty standards for crypto exchanges that do not follow compliance strictly. The new laws are yet to take effect in the country, but a number of exchanges such as Bithumb have started chaffing out accounts from some countries and those without KYC compliance.
Apart from new penalty standards, the revised “Act on Reporting and Using Specified Financial Transaction Information” will update the existing rules and reduces penalties for small-scale businesses. The new law stipulates that any virtual asset provider will be charged in violation of internal control duties (not reporting suspicious Txs activities), duties pertaining to VASPs such as separating management details of customers’ Txs records, and data management (keeping relevant data of suspicious transactions).
Failure to follow the law will attract a fine of between 30% and 60% of the maximum penalty (or $26,000 to $92,000). The law also stipulates that smaller companies will get smaller penalties, and some of the charges will reduce the penalties up to 50%. Small firms can be charged a lower penalty than the 50% charged on smaller charges.
The law will take effect on April 10th, after the gazette period ends.