South Korea Releases Official Guidelines for Cryptocurrency Exchanges and Banks
24 Januar 2018 - 11:41AM
ADVFN Crypto NewsWire
The South Korean government
has officially released two sets of previously promised guidelines
that specify cryptocurrency regulatory measures. In addition to
details of the new real-name system to end anonymous trading of
cryptocurrencies, the government also published its anti-money
laundering guidelines for banks providing services to
cryptocurrency exchanges.
Implementation of Crypto
Measures
On Tuesday, the South Korean
government officially released a document containing
the guidelines for cryptocurrency regulations
it previously promised. The announcement was made by Vice Chairman
of the Financial Services Commission (FSC), Kim
Yong-bum.
This document details the
government’s Special Measures for the Elimination of Virtual
Currency Speculation which was first announced on December 28. In
addition, the government also announced on Tuesday its anti-money
laundering (AML) guidelines, prepared by the Korean Financial
Intelligence Unit (FIU), an FSC division, for all banks dealing
with cryptocurrency accounts to follow.
Converting to Real-Name System
A large part of the government’s
special measures concern the new government-mandated real-name
account system. This system will replace banks’ current practice of
virtual account issuance. Virtual accounts are issued by banks for
cryptocurrency exchanges’ customers to use to deposit and withdraw
money.
On January 30, the real-name system will be live for deposit and
withdrawal services to cryptocurrency accounts. Existing virtual
accounts will be converted to real-name ones at that time. Six
major banks will implement the new system including Shinhan Bank,
Nonghyup Bank, Kookmin Bank, Hana Bank, and Gwangju
Bank.
Customers need to open an account
at the bank providing virtual account services to the exchange they
are using. “New members should be added after strict identification
procedures,” Kim was quoted by Joongang Ilbo. According to the
document:
Users who do not have an account at
the same bank as the virtual bank will not be able to make
additional payments to the virtual bank [account], but they can
withdraw money…Foreigner and minors under the Civil Law cannot use
real name confirmation deposit and withdrawal account service.
AML and Suspicious Transaction
Reporting
Earlier this month, the FIU and the
Financial Supervisory Service (FSS) conducted on-site inspections of the country’s 6 major banks
to ensure they have fulfilled their anti-money laundering
obligations. The FIU subsequently created a set of anti-money
laundering guidelines which was released on Tuesday.
Crypto exchanges usually separate their funds from users’ funds.
However, the government’s inspections revealed that “some exchanges
were found to have collected funds from users through general
corporate accounts opened at banks,” the Kyunghyang Shinmun
reported.
In some cases, customers’ funds
were transferred to the bank accounts of the exchanges’
representatives. One exchange “collected funds from users through
four bank accounts” into the company’s account “and spent 58.6
billion won” from it, the news outlet added. The financial
authorities noted that this can lead to fraud and
embezzlement.
The Hankook-Ilbo elaborated that
banks are required to “monitor the exchanges [they service] for
unusual transactions in accordance with the guidelines and, if
suspected of money laundering, further confirm the transaction
purpose and funding source,” adding that:
If the transaction amount is more than
KRW 10 million per day, more than KRW 20 million for 7 days, or
frequent transactions occur in a short time, it should be reported
to the FIU, the money laundering monitoring authority. If the
exchange has a high risk of money laundering or requires
information, the bank may terminate the transaction.
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