South Korea’s Financial Services Commission Propose Direct Regulation for Cryptocurrency Exchanges

August 7, 2019 By: Nwabundo Wisdom

 

South Korea is taking steps to bring cryptocurrency exchanges across the state under direct regulation, according to a report from a source on August 7.

Per the report, the Financial Intelligent Unit (FIU) of South Korea’s Financial Services Commission disclosed that it is currently working on plans to bring all cryptocurrency exchanges under its direct regulation.

According to statement by an official of the FIU on August 6, the South Korean government intends to plans to achieve this objective through the introduction of a cryptocurrency exchange licensing system, an initiative of the Financial Action Task Force (FATF). This it noted will improve transparency of cryptocurrency transactions.

The Head of Administration and Planning at the FIU, Lee Tae-hoon, speaking at a public hearing at the National Assembly Member’s Office held in Seoul, disclosed that if the decision to bring cryptocurrency exchanges under direct regulation is upheld by lawmakers, it would enhance the effectiveness of cryptocurrency exchanges. He added that:

“If an amendment to the Act on Reporting and Use of Certain Financial Transaction Information, which reflects the FATF’s international standards for cryptocurrencies, passes the National Assembly, it will be possible to prevent money laundering through cryptocurrencies.”

Reactions from various commentators who noted that regulatory authorities in South Korea must first ensure that existing regulations are adhered to, one of which is that the banks must issue real-name accounts to cryptocurrency exchanges, while cryptocurrency exchanges in the face of compliance by the banks, will in turn adhere to Know-Your-Customer standards and anti-money laundering regulations.

 

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