South Korea Releases New Cryptocurrency Regulations and They are Positive

The Financial Services Commission (FSC) of South Korea, the main financial agency in the country, has just revealed its new cryptocurrency regulatory guidelines for anti-money laundering (AML) and Know Your Customer (KYC) practices that will be required from cryptocurrency exchanges.

The new regulatory framework targetted at crypto exchanges has further tightened the existing AML guidelines and users monitoring system. FSC has requested Korea Financial Intelligence Unit (KFIU), the national financial watchdog to oversee the overall cryptocurrency transactions and user activities in the country.

• Foreigners are not using local exchanges to transact digital asset
• Criminals are not using individual accounts to launder money
• Prevent suspicious transactions and payment processing

The motive why the commission is ordering this is because criminal organizations have more than once borrowed accounts from individuals to purchase massive amounts of funds on local exchanges and then withdraw the funds with different accounts. Authorities have also advised the banks to inform them whenever any individual moves large sums of capital in suspicious transactions.

The second policy imposed by the government is preventing the re-emergence of the “Kimchi Premium” by spotting suspicious fund movements in and out of cryptocurrency exchanges and banking accounts connected to crypto exchanges. If banks have a reason to believe that a user or an organization are transferring large sums of capital for the sole purpose of taking advantage of the “Kimchi Premium” in South Korea, authorities can investigate into the user or the organization.

These new regulations show that the government is finally ready to accept cryptocurrencies as something that are here to stay instead of trying to shut them down. At the same time, the government will only allow them with a higher level of security.

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