thecoinrepublic.com
- South Korean Government holds meeting with 20 Crypto exchanges
- The Government is maintaining its stance to avoid Money Laundering
- Banks not to do business with Crypto Exchanges
The Korea Financial Intelligence Unit of the Financial Services Commission (FSC) has come down hard on cryptocurrency exchanges and initiated a monitoring and surveillance procedure against them. iWith South Korea’s crypto-monetary exchanges for business licences less than four months, many struggles to meet new regulatory standards. South Korea is one of the world’s most active crypto marketplaces, with recent allegations indicating many employees leave the nation to become full-time crypto traders in their 20s and 30s.In some cases, Bitcoin’s price on local markets has been boosted by this excitement, with the so-called premium from Kimchi reaching 22% on one occasion earlier this year.
It is expected that FSS will closely monitor the implementation of regulator measures that were previously introduced. These include the Act on Reporting and Using Specified Financial Transaction Information, which will impose certain restrictions on crypto exchanges operating in the country.
By punishing market manipulation regarding cryptocurrency exchanges, the Korea Financial Intelligence Unit of the FSC Financial Services Commission launched its monitoring and surveillance. However, it continues to confine its regulation to the prevention of money laundering.
The regulators of South Korea were also highly alerted and implemented many procedures to ensure that users and companies could comply with the requirements. In complying with the Financial Action Task Force (FATF) standards to fight money laundering and terrorist finance, as amended by the National Assembly in March 2020, cryptocurrency trading platforms will be required.
The closed-door meeting with 20 VASPs South Korean Regulator
Recently, on June 3, the Korean Financial Intelligence Unit met with cryptocurrency bills and told them to present business plans to safeguard traders. It also explained the inter-trading and trading prohibition of executives and exchange employees, stating that the trade is responsible for detecting unlawful activity connected to cryptocurrencies and that the exchanges and banks that deal with them are liable for the effects of the actions. The attending ISMS certified exchange people were from Upbit, Bithumb, Korbit, Coinone, Kordax, Coinncoin, Tenten, Polegate, and Flybit. The meeting was called Report Registration Directory Consulting, which stated that the actual name criteria had been completed by only Upbit, Bithumb, Korbit and Coinone.
In the conditions, banks will probably discontinue exchanging, i.e. the issue of a real-name account and certain bonds will likely be driven out. According to the Government, there are now around 60 crypto-monetary exchanges in South Korea, and just 19 have joined the meeting. This imposes the risk of investment losses on a significant number of bitcoin investors. Additionally, the exchange is needed to secure an authorization for operation in Korea within 24 September from the Financial Services Commission (FSC) and the Korea Internet and Security Agency.
China had taken this same action by blocking several cryptocurrency-related social media accounts on Bitcoin trading and mining. In China, the Chinese State Councillor cabinet promised last month, after three industrial institutions ban cryptocurrencies related financing and payment services, to tackle bitcoin extraction and trade escalated a cryptocurrencies campaign.
Crypto accounts will need to report holdings of South Korean Citizens With Overseas in 2023
In the meantime, the National Tax Service (NTS) of South Korea has revealed to tax authorities that citizens with foreign exchange accounts must register crypto holdings. NTS reported that the laws for cryptography abroad would take effect on 1. January 2022, and that by June 2023, persons must report on cryptographic assets.
The agency advised South Koreans utilizing foreign exchanges to declare all earnings made from them as well. By doing so, the owners of cryptographic products should pay their corresponding 2022 taxes.
More crucially, new laws necessitate real-life verification methods from exchanges and wallet providers, which needs relationships with licenced financial institutions. However, Korea is apparently in the process of ensuring the requisite banking relationships. It prepares to register with the FSC, with many smaller platforms facing challenges as the main exchanges like Upbit, Bithumb, Korbit and Coinone.