South Korean regulators warn dozens of foreign exchanges to comply with new rules
The Marketing of crypto exchanges abroad to Koreans will be blocked if they do not comply with new South Korean regulations. The national anti-money laundering body sent a notice to a come number of foreign trade platforms warning them that registration is required in order to provide services to Korean residents.
Korea Financial Intelligence Unit Notifies Foreign Crypto Exchanges of Registration Requirements
Access to Foreign Based Crypto Exchanges may be refused and platforms may be investigated if they do not comply with the country's new regulations for the sector. One of the main requirements is to register with Korea's anti-money laundering agency, the Financial Intelligence Unit (FIU), by September 24.
To remind them of their obligations, the FIU sent a notice to 27 entities with crypto trading operations targeting Korean nationals, the Financial Services Commission ( FSC ) announced Thursday, as quoted by the Korea Herald. Regulations passed earlier this year also require exchanges to have information security certificates, but none of them. 'between them didn ' t retain one yet, officials said.
The commission stressed that foreign exchanges will cease trading in Korea from September 25, unless They do not register with the FIU Unregistered activities will result in penalties, including up to five years in prison and a fine of up to 50 million Korean won (over $ 43,000). In a statement sent to the National Parliamentary Policy Committee, the FSC explained:
The deadline for compliance approaching with few exchanges meeting new requirements
South Korea's revised special funds law took effect on March 25 but will be implementedin September after a six-month grace period. Another of its updated provisions requires cryptocurrency exchanges to cooperate with national banks on the issuance of real accounts for their users. While the country's four major coin exchanges - Bithumb, Upbit, Coinone, and Korbit - have partnered with commercial banks, hundreds of smaller exchanges are front closures .
Korean banks fear exposure to money laundering, hacking, fraud and others risks . Under the new rules, they will be responsible for assessing the transparency of a crypto platform and the possibility of criminal activity. The claims for exoneration of liability for breaches committed through the crypto exchanges they work with are said to have been rejected by Korean regulators earlier this month.
According to the Korea Herald, the FSC plans to send guidelines regarding the new regulations to foreign crypto operators providingant services in the country. "If overseas cryptocurrency exchanges serve local customers with won settlement, they must register with the FIU and comply with government guidelines to prevent money laundering FSC Chairman Eun Sung-soo told lawmakers last week.
South Korea's financial regulator toughens stance on foreign crypto service providers after authorities in several other jurisdictions, including Italy , Lithuania , the United Kingdom, Japan , Germany and Poland have issued warnings against Binance , the world's leading digital asset trading platform. New regulatory measures regarding the exchange range from temporary suspension of operations to stricter reporting requirements, the Korean daily notes, revealing a growing global crackdown on the market.
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