Korea Will Regulate Cryptocurrency Exchanges Like Commercial Banks

The Korea Financial Intelligence Unit (KFIU) and other local financial agencies will regulate cryptocurrency exchanges like banks, imposing strict anti-money laundering (AML) policies to ensure criminals do not utilize cryptocurrencies to finance illicit operations.

Similar to Japan

During the Policy Advisory Council meeting held on June 8, KFIU director Kim Geun-ik led an extensive discussion on existing money laundering and terrorist financing prevention regulations and proposed stricter policies for both commercial banks and independent financial service providers.

At the time, the KFIU stated that it will follow the movement of leading economies such as the US to prevent money laundering and terrorism financing with more rigorous verification processes for large transactions and monitoring of users.

Initially, the KFIU planned to impose new policies on large-scale financial institutions, retail investors, and traders in the public stock market and other sectors that currently have lenient AML and Know Your Customer (KYC) regulations.

But, in later discussions, the KFIU decided to include the cryptocurrency sector in its AML and KYC initiative. The KFIU stated that the agency will coordinate with the Congress to pass a bill that would allow local financial authorities to monitor traditional bank account and cryptocurrency users extensively with transparency.

At the moment, cryptocurrency exchanges in South Korea can operate as a communication vendor, with a $40 license. As such, even the Free Trade Commission, the country’s regulatory authority for economic competition, does not have the authority to monitor and oversee crypto exchanges…

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