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Last week, South Korea’s top financial regulator formed dedicated cryptocurrency investigative teams across the nation.
Several South Korean financial authorities are preparing to join forces to kerb illicit cryptocurrency activities such as Bitcoin (BTC).
According to Koo Yun-cheol, director of the Office for Government Policy Coordination, the interagency crackdown is in response to growing worries about risky investments and potentially illicit activity given the continuing boom in crypto markets.
“There is a need to pay special attention to the occurrence of illegal activities using virtual assets,” he stated at a vice ministers’ meeting on crypto, according to local news agency Yonhap.
As part of the crackdown — which is slated to continue until June — the Financial Services Commission will require local financial institutions to strengthen the monitoring of withdrawals of cryptocurrencies. Any suspicious activity should be reported to the state-run Financial Intelligence Unit, an agency responsible for investigating financial crimes.
Other regulators, such as the finance ministry and the Financial Supervisory Service, plan to keep an eye on cross-border crypto transactions, according to the paper.
Since enacting the Act on Reporting and Using Defined Financial Transaction Information in late March 2021, South Korea has been subjected to stringent regulations. Local crypto exchanges, according to the regulation, must establish partnerships with local banks to insure obligatory real-name account trading. According to a March study, South Korea’s National Tax Service has increased its efforts to fight tax evasion involving cryptocurrency.
South Korean regulatory changes arrive on the heels of fresh historic milestones in crypto markets last week, with Bitcoin breaking through $64,000 on April 14. Despite record crypto rates, Bank of Korea Governor Lee Ju-yeol argued that cryptocurrencies have “considerable limitations” as a payment tool, warning that their unpredictable market swings pose a challenge to financial stability.