South Korea’s financial authorities, led by the Korea
Financial Intelligence Unit (KoFIU), are planning to implement stringent measures
targeting cryptocurrency exchanges. Exchanges failing to meet the stringent
standards will face expulsion from the marketplace, according to a report by the KoreaTimes.
Authorities will expand the scope of screening to
block the entry of inadequate virtual business operators into the
cryptocurrency market. This proactive approach aims to maintain market
integrity and protect investors.
The Korean government is considering a preemptive trading
suspension system for suspicious transactions, even at a pre-investigation
stage. This move aligns with recommendations from the Financial Action Task
Force, a global anti-money laundering organization.
KoFIU’s annual work plan outlines key policy
directions and measures aimed at safeguarding the cryptocurrency industry.
Plans were devised in consultation with industry experts and stakeholders. KoFIU plans to thoroughly examine cryptocurrency exchanges, focusing on anti-money laundering measures,
operational capacity, and consumer protection. Exchanges facing scrutiny
include those up for renewal registration later in the year.
Stringent inspections align with the impending
enactment of Korea’s first protection law on virtual asset consumers, effective
July. Commissioner Rhee Yun-su emphasizes the importance of institutional
improvements to ensure seamless industry operation.
South Korea’s Virtual Asset Regulations
Recently, The South Korean Financial Services
Commission (FSC) proposed changes to its reporting requirements for virtual
asset service providers targeting the employment of executives in the crypto
sector.
The proposed amendment mandates regulatory approval
for executives joining crypto firms, giving the FSC authority over personnel
changes. This move aims to regulate the industry more effectively and impact
VASP license renewals.
By requiring regulatory vetting for executives
joining crypto firms, the FSC aims to ensure greater accountability and
transparency in personnel appointments. The FSC will possess the authority to
suspend license reviews if any investigations into company personnel are
ongoing.
Besides that, South Korea’s financial authorities
are taking proactive measures. The proposed regulations restrict…
