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South Korea: regulator sets new rules for foreign exchanges

The Korea Financial Intelligence Unit is warning overseas crypto exchanges that target Korean citizens
South Korea

The Korea Financial Intelligence Unit is warning overseas crypto exchanges that target Korean citizens.

Crypto exchanges that offer their services to customers from South Korea were given two months to register with the country’s anti-money laundering body. The KFIU communicated to 27 digital currency trading platforms that they must fulfill the requirements and new regulations set by the government. 

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The platforms are also called to obtain a certificate on information security from South Korea. If they don’t comply with all the requirements set by the watchdog, the exchanges must cease offering their services to Korean clients after September 25. If they persist in operating after this date, fines and jail time is expected.

“If they continue to operate without registration, they will be subject to up to five years of imprisonment or a maximum fine of 50 million won (US$43,455).”

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Even if foreign platforms are being put more under pressure, the rules will apply to domestic ones as well.

South Korea has been trying to set up new regulations in order to protect its citizens from fraud and fight money laundering. Back in June, the Financial Services Commission instructed banks to treat exchanges as high-risk clients to diminish.

South Korean digital currency exchanges must also comply with the ID verification procedures and communicate questionable transactions to an anti-money laundering unit called Korea Financial Intelligence Unit (KoFIU). The regulatory action affected nearly 60 platforms operating in the country.

Back in June, South Korean authorities confiscated more than 50 billion won from individuals accused of evading taxes. The seized amount was taken from 12,000 tax dodgers. Officials in the province of Gyeonggi claim to have carried out one of the largest tax seizures in South Korea.

According to a law passed in 2020, South Korean exchanges must comply with the ID verification procedures and communicate questionable transactions to an anti-money laundering unit called Korea Financial Intelligence Unit (KoFIU). The regulatory action affects nearly 60 platforms operating in the country.

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