South Korean Crypto Exchanges Asked To Strenghten Anti-Money Laundering (AML) Compliance
We have had weeks with no negative news in the crypto ecosystem. However, there is some regulatory news from South Korea that has had some crypto businesses in the country nervous.
Financial Action Task Force (FATF) has requested the financial authorities of the member states to regulate cryptocurrency exchanges in the same way that they do for banks. This is done to make sure that there are no illegal transactions.
Consequently, close to 200 South Korean cryptocurrency exchanges on alert. Many of these exchanges like Bithumb, Upbit, Coinone and Korbit, use real-name accounts issued by banks. However, those who haven’t should be in a panic mode to strengthen their anti-money laundering system.
One of the major recommendations by FATF is that cryptocurrency exchanges should provide information about remitters and receivers to financial authorities when they send and receive more than US$1,000.
The news outlet that broke this story, Business Korea said:
“As Deputy Prime Minister and Finance Minister Hong Nam-ki agreed to actively implement the exchange management and supervision plans from the FATF’s financial recommendations at a recent meeting of central bank governors and finance ministers of the G20 countries, South Korean cryptocurrency exchanges are also expected to be affected by the FATF’s recommendations.”
The Financial Action Task Force is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering. A few weeks back FATF said that crypto firms will be subjected to rules to prevent the abuse of digital coins such as Bitcoin for money laundering. The move reflects a growing concern among international law enforcement agencies that cryptocurrencies are being used to launder the proceeds of crime.
South Korean authorities have been tightening their regulatory standards recently. Earlier this month, Bithumb had been prosecuted for its alleged failure to take adequate measures to protect personal information, which was later presumably exploited by hackers to steal funds from the platform.