Local regulations toughened circa 2017–2018
Bosses of cryptocurrency exchanges that fail to register with South Korea's top financial regulator may soon face jail time. Under the amendment, aimed to align the industry with international anti-money laundering guidance from FATF, crypto exchanges must also have so-called real name virtual bank accounts — sub accounts for users within an exchange's primary account — to avoid falling foul of the legislation.
According to the report, opposition lawmakers had expressed concerns that that exchanges without real-name virtual accounts would be forced to close, bringing further contraction of the domestic cryptocurrency industry. In early , the FSC outlawed anonymous virtual accounts with the result that only four exchanges were left with real-name virtual accounts through contracts with local banks: Bithumb, Upbit, Korbit, and Coinone. As a result of the concerns, the amendment, if passed into law, would make it easier for exchanges to qualify for real-name virtual accounts.
Lee Jun-haeng, CEO of the Gopax exchange, which does not have a real-name virtual account as yet, said the change would make for a "healthy" market as long as the system is fair. Also loosened in the legislation is the obligation for certification of an exchange's information security management system.
The committee agreed to give a grace period for reapplication should certification fail initially. The Special Financial Transactions Information Act would ultimately mean that the crypto-related industry will move out of a regulatory gray area and enter the system as regulated financial institutions like banks, CoinDesk Korea says. The act, including the new amendment, is likely to be passed by the National Assembly, the report says.
However, the amendment may see more changes after review from other government bodies. The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.
CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. Read more about Exchanges South Korea Regulation Legislation. Disclosure Read More The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Tata Consultancy Services. Court Cases.
Major milestone for South Korea and local exchanges
As reported by The Hankyoreh daily newspaper, the FSC could consider the operations of the cryptocurrency exchanges in South Korea like Bithumb, Coinone, and Korbit, as unauthorized fundraising. At present in the country, all cryptocurrency exchanges come under the Act on Consumer Protection in Electronic Commerce Transactions. This allows them to operate as e-commerce websites and clients registering to the online platforms as vendors. The FSC does not treat cryptocurrencies as financial instruments, but as unauthorized fundraising. Based on the worldwide trading demand of cryptocurrencies, the FSC is not considering a blanket ban on the exchanges but it is planning to allow the operation under certain rules. The authorities will also be empowered to prosecute exchanges that break these rules.
Hwang Mok Park PC
Over 40 companies in South Korea are participating in cryptocurrency self-regulation. Among them are 14 exchanges which have agreed to implement self-regulatory measures; they include Bithumb, Coinone, and Korbit. This announcement came just one day after the Korean government released its emergency crypto regulation. The Korean Blockchain Industry Association announced self-regulatory measures for cryptocurrency exchanges at a press conference in Seoul on Friday.
The association claims to have over 40 companies participating in the self-regulatory initiatives. The Korea Times elaborated:. The self-regulatory measures will be implemented starting in January of next year. In addition, only one registered crypto trading account per user will be allowed. Face-to-face identity verification will be required before any deposits or withdraws can occur.
Specifically, the regulators have asked banks to identify users of virtual bank accounts. However, banks claim that they issue these accounts to crypto exchanges without knowing whom each one is assigned to.
Financial institutions are now collaborating with the Korean Blockchain Association to come up with a way to comply with the regulation. A number of major Korean banks have begun working together to develop a system of identifying virtual account customers. The association also imposes requirements on cryptocurrency exchanges, to be implemented on January 1 of next year. News33 elaborated:. It should be a place that can implement information security system, internal process, and information security manpower similar to a financial provider.
In addition, Kim said the association will suspend the listing of all new cryptocurrencies for the time. However, these measures are not compulsory as the association is a private organization and cannot enforce rules on exchanges.
However, any exchanges in violation of the rules regularions be dismissed from the association. Lastly, association members also agreed to operate a committee for investors to receive legal kotea.
What do you think of Korean exchanges implementing these self-regulatory measures? Let us know in the comments section. Need to calculate your bitcoin holdings? Like crypto payments provider Bottle Pay, mining pool Simplecoin and interactive bitcoin faucet Chopcoin are shutting down in light of… read. A student of Austrian Economics, Kevin found Bitcoin in and has been an evangelist ever. His interests lie cryptocurrehcy Bitcoin click here, open-source systems, eschange effects and the intersection between economics and cryptography.
Share this story:. Dec 18, Dec 13, Dec 6,
25 Crypto Exchanges to Self-Regulate
The material on this site is http://trackmyurl.biz/cryptocurrency-exchange-in-pakistan-5788.html financial institutions, professional investors and their professional advisers. There are no explicit laws and regulations for cryptocurrency payments. In addition, various local governments in Korea are exploring the cryotocurrency of issuing their own cryptocurrency. Under the amendment, aimed to align the industry with international anti-money laundering guidance from FATF, crypto exchanges must also have so-called real name virtual bank accounts — sub accounts for users within an exchange's primary account — to avoid falling foul of the legislation. The act, including the new amendment, is likely to be passed by the National Assembly, the report says. Financial institutions must also appoint a staff member dedicated to monitoring suspicious cryptocurrency transactions. Ownership and licensing requirements. Read more:. This decision represents the first time the Regulatins Court recognised cryptocurrency as property. The committee agreed to give a grace period for reapplication should certification fail initially. Under the FSCMA, an offer or sale of securities tokens to 50 or more non-accredited investors excluding professional investors would be regarded as a public offering and be subject to offering restrictions under the FSCMA. Tell me. The notable requirements in the AML Guidelines are as follows:. Reporting requirements. These bills generally cover, among others, licensing requirements for cryptocurrency businesses, anti-money laundering requirements, consumer protection, cybersecurity requirements for cryptocurrency exchanges, and damage compensation for consumer losses.