South Koreans to Face Tougher Crypto Laws to As Regulators Tackle Cases of Money Laundering
The South Korean financial authorities are tightening up regulations in a bid to combat illegal transactions and money laundering.
The South Korean government is focusing on tackling crypto-enabled crimes and illegal transactions across exchanges with tougher regulations on the crypto industry. In a meeting held on Friday, top government officials and economy-related ministers discussed regulations to trace illegal crypto transactions, fraud in the industry, and the overall volatility across the market, a report by Korean Herald stated.
Additionally, the financial regulators are putting up guidelines to oversee remittances made by overseas investors who make a profit by selling Bitcoin on Korean exchanges. The Korean Financial Service Commission (FSC) has in the past asked crypto and financial firms to carry out enhanced monitoring into illegal activities and money laundering using crypto. BTC -2.83% Bitcoin / USD BTCUSD $ 23,388.43
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Under the new laws, financial firms and crypto exchanges must report any money laundering and suspicious financial crimes to the Korea Financial Intelligence Unit (KoFIU) within three days of discovering the crime. The financial regulator will then conduct investigations on the money laundering claims to reduce the fraud and speculation budding across crypto markets.
Gu Yoon-Cheol Chief of the Office for Government Policy Coordination
“Individuals should make careful decisions related to cryptocurrencies as crypto assets, which have no intrinsic value, are means of speculation rather than investment.”
The virtual meeting, led by the Financial Supervisory Service (FSS), also focused on the “kimchi premium” on Bitcoin – a price gap between global crypto exchanges and Korean exchanges. As of writing, Korean exchanges are selling Bitcoin at 10% higher than those in the U.S. or other nations.
South Korea has been facing stricter financial reporting laws after implementing the Act on Reporting and Using Specified Financial Transaction Information last month. The new laws set new penalty standards for virtual asset service providers with lax KYC/AML policies, violation of internal control duties, and other financial reporting negligence acts.
Furthermore, KoFIU asked VASPs to collect and report customer transaction information to reduce the cases of money laundering through virtual assets. According to the law, which came to effect on April 10th, exchanges that fail to collect and report this information could face hefty fines or up to 5 years imprisonment.