Korean Watchdog, the Financial Services Commission (FSC) announced that any Foreign Cryptocurrency exchanges focused on Korean investors, must follow the Anti Money Laundering (AML) guidelines, and register with South Korea’s anti-money laundering body. The failure to do so shall result in a ban from operating in Korea and criminal charges, along with a hefty fine.
Over 27 foreign cryptocurrency exchanges that have business operations targeting Korean people have received notices from the Korea Financial Intelligence Unit (KFIU) to register with it, by the latest Korean AML regulations. Along with registering with the KFIU, cryptocurrency exchanges are also required to acquire a certificate in information security from South Korea. However, FSC has informed that crypto exchanges have yet to obtain the certain and that without it they shall face the consequences as mentioned in the latest policy. According to the notices, the grace period will end on 25th September.
“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),” the FSC said.
Earlier in March, the new crypto regulations in Korea came into effect, with a six-month grace period, up till September. Eun Sung-soo, chairman of South Korea’s Financial Services Commission (FSC) announced that any crypto exchange that operates in the Korean region, will be mandated by FSC’s AML regulations. Foreign crypto exchanges will be required to get authorization from the FSC’s AML watchdog, i.e., the Korea Financial Intelligence Unit.
Moreover, the new regulations will also be implemented on domestic exchanges. All exchanges, Foreign or Domestic will be required to issue real-name accounts in Banks, under tightly knit guidelines to prevent money laundering in the Korean region. Furthermore, Banks will be responsible to access the transparency, business risks, and the possibility of criminal activity of these crypto exchanges.
Over 100 small cryptocurrency exchanges in South Korea, will be impacted by the latest regulations. Earlier these exchanges had been using Opaque accounts that allowed them to get more investors. However, now they will be restrained by the regulations to register under real-name accounts that may force many of these exchanges to shut down.
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