South Korea Set to Ban the Trading of ‘Privacy Enabled Coins’ On Virtual Asset Exchanges
- South Korea bans “privacy coins” trading on crypto exchanges.
- The updates were made as part of the guidelines to the “Special Payments Act.”
South Korea’s leading financial watchdog, the Financial Services Commission (FSC), announced on Tuesday a ban on the trading of privacy-enabled cryptocurrencies such as Monero (XMR), Dash (DASH), and Zcash (ZEC) from any virtual asset service provider platform. The move follows a guideline update on the ‘Special Payments Act’ that governs the country's cryptocurrencies laws.
According to the statement, the FSC claims privacy-enabled coins enable high money laundering risk due to the difficulty tracing the transactions. In 2018, the Seoul Central District Prosecutors’ Office opened a case on drug dealers who received privacy coins in payment for their illegal goods. The new amendments will curb these kinds of payments preventing the spread of illicit and illegal activities.
The amendments by the FSC will start being implemented and enforced in March 2021, creating strict laws against trading privacy cryptocurrencies. Notwithstanding, the crypto exchanges in South Korea will have to comply with KYC/AML regulations. Customers will have to verify their accounts using a passport, identification card, or any government-recognized document.
Several exchanges have already delisted privacy coins, including South Korean-based OKEx and Upbit exchange. The Japan-based crypto exchange, Liquid, also announced the delisting of Zcash (ZEC) and the other 28 coins to comply with Singapore’s laws.