The local financial agency, Korea Financial Intelligence Unit (KFIU) will regulate crypto exchange like banks. Likewise, imposing a strict anti-money laundering (AML) policies that ensure cryptocurrencies are not utilizing for illegal activities.
The Kim Geun-ik, director of KFIU had an extensive discussion on money laundering and terrorist financing prevention at Policy Advisory Council meeting held on June 8. He spoke about the implementing stricter rules for both commercial banks and independent financial service providers.
At the meantime, the KFIU preferred to follow the US the leading economic movement in preventing money laundering and terrorism financing. Since, US have more rigorous verification processes for large transactions and monitoring of users.
Kim Geun-ik said,
“There is the need for us to improve our anti-money laundering system to meet international standards already in force in other countries”.
Further in discussion, the KFIU speaks about including the cryptocurrency sector in its AML and KYC initiative. Therefore, KUIF decided to coordinate with the Congress to pass a bill that enables local financial authorities to manage bank accounts and crypto users with more clarity.
However by the time, South Korea crypto exchanges can operate as a communication vendor with a $40 license. Likewise, even the country’s regulatory authority, the Free Trade Commission doesn’t have the any influences to monitor and oversee crypto exchanges.
KFIU spokesperson said;
“Under current regulations, there are clear limitations in preventing money laundering on crypto exchanges because the only way authorities can spot suspicious transactions are through banks. If the bill of lawmaker Jae Yoon-kyung from the Democratic Party of Korea passes. The local authorities will be able to impose identical regulations on crypto exchanges that are implemented on commercial banks”.
Moreover, if the proposed bill passes, crypto exchanges will be regulated as commercial banks and financial institutions. For a while, the strict Anti-money laundering and Know Your Customers rules seems to be uncomfortable ecosystem for user at first. But then, it will add authenticity to evolving crypto and blockchain sector.