South Korean cryptocurrency exchanges are expected to be directly regulated by the Financial Intelligence Unit (FIU) if the South Korean regulator’s proposal is accepted.
The South Korean watchdog, acting under the Financial Services Commission (FSC) to safeguard financial interests of the public, has recently divulged a plan to bring the South Korean cryptocurrency exchanges directly under its ruling and call a halt to indirect administration through local banks.
In an official announcement, made on Aug 06, the country’s financial regulator revealed the motive behind the move. It declares that the initiative is expected to strengthen the transactional security and combat money laundering activities.
The licensing system designed for the cryptocurrency exchanges by the Financial Action Task Force (FATF) will presumably make the exchange platforms answerable to the FIU.
Apparently, the stringent regulatory reforms have been proposed a week after the unofficial reports disclosing names of four South Korean cryptocurrency exchanges which had to undergo rigorous scrutiny during the renewal of their bank accounts.
South Korean cryptocurrency exchanges to bring in better transparency and security
FIU’s head of administration and planning, Lee Tae-hoon, declared in his statement at a public hearing in Seoul that the proposed amendment to the existing cryptocurrency reforms, per international standards, will go a long way in the country’s fight against black money and cryptocurrency scams.
Moreover, he expresses optimism over the enactment of a law for greater efficiency and transparency. He firmly believes that a direct administration of the exchange services, instead of supervision through commercial banks, will be more productive.
Meanwhile, excerpts from South Korean cryptocurrency exchange community and legal experts reveal that should the proposal go through; the regulatory amendments will need to be incorporated into the existing specifications to make sure that exchange platform has the same level of consumer information access as the traditional banks.
Only then can the platforms identify any suspicious financial activities.