South Korea’s stringent crypto regulatory monitoring is now expanding to international exchanges that provide cryptocurrency trading services in the country’s currency.
The head of South Korea’s Financial Services Commission (FSC), Eun Sung-soo, has stated that international crypto exchanges dealing in Korean won must adhere to the country’s anti-money laundering regulations.
According to The Korea Herald on Tuesday, Eun made these comments while fielding questions from lawmakers about the FSC’s plans to regulate crypto exchange giant Binance.
Eun emphasised the need of offshore exchanges offering won-denominated crypto trading pairs adhering to the same anti-money laundering requirements as platforms headquartered in the nation.
These international exchanges will be need to register with the Korea Financial Intelligence Unit, the FSC’s AML monitor, as part of this compliance.
The FSC chairman’s statements also provide more evidence of South Korea’s attempts to retain rigors control of its domestic cryptocurrency industry. In April, the government initiated an interagency effort to fight illicit cryptocurrency transactions such as money laundering and tax evasion.
A recent investigation found $1.48 billion in illicit foreign crypto transactions, as previously reported by Cointelegraph, with over 30 persons accused in the case.
Eun’s demand to register exchanges is part of the new law, which was announced in March but is set to go into force in September.
Exchanges must use real-name account trading in addition to AML compliance. As a result, platforms must establish banking connections with local financial institutions.
Only the “big four” — Korbit, Bithumb, Coinone, and Upbit — are now in conformity with the real-name trading rule. Smaller cryptocurrency exchanges, according to reports, are having difficulty securing banking relationships and fear being barred from functioning after the six-month grace period expires in late September.
Meanwhile, prominent South Korean banks are joining the cryptocurrency custody market, with Woori being the latest financial institution to launch a cryptocurrency custodian product.