South Korea Announces Its New Cryptocurrency Regulatory Guidelines
The Financial Services Commission (FSC) of South Korea, the main financial agency in the country, has just revealed its new cryptocurrency regulatory guidelines for anti-money laundering (AML) and Know Your Customer (KYC) practices that will be required from cryptocurrency exchanges.
What Are The New Regulations In South Korea?
One thing that is definitely going to change under the new policies is the regulation for preventing money laundering as the FSC will regulate transactions more and it will have requested the help of the Korea Financial Intelligence Unit (KFIU) to oversee the crypto transactions on the country.
Also, the commission has ordered the authorities to invest the three major banks that are dealing with cryptos and virtual accounts: Nonghyup, Hana Bank and Kookmin, to prevent money laundering.
The crypto exchanges will have to conduct Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) to ensure that background checks of the clients are made. This a measure to prevent foreigners from using local crypto exchanges, criminals to launder money and suspicious transactions.
The motive why the commission is ordering this is because criminal organizations have more than once borrowed accounts from individuals to purchase massive amounts of funds on local exchanges and then withdraw the funds with different accounts. Authorities have also advised the banks to inform them whenever any individual moves large sums of capital in suspicious transactions.
These new regulations show that the government is finally ready to accept cryptocurrencies as something that are here to stay instead of trying to shut them down. At the same time, the government will only allow them with a higher level of security.
Will Cryptocurrency Be a Legitimate Industry in South Korea?
The South Korean government has stated more than once that it was reluctant to regulate cryptos as it feared that the investors would understand it as a way of the government acknowledging and legitimizing it.
However, the government has changed its stance and revealed plans to regulate banks and cryptocurrency exchanges. This was considered to be the first step towards regulating the industry properly in one of its main markets in the world.