A Coindesk Korea report says that the South Korean government has now decided to do away with the guidelines for Anti Money Laundering (AML) within virtual currency, and will instead introduce legislation to directly regulate cryptocurrency exchanges.
Last week, the Financial Services Commission, the South Korean monetary authority, included the ‘Guidelines for Preventing Virtual Money Against Money Laundering’ in the list of twenty-two administrative guidances to be repealed. This was originally rolled out in January 2018, which allows for banks to refuse or terminate transactions if they consider the risk of money laundering and other undesirable activities to be too high.
This all stemmed after the FATF (Financial Action Task Force) issued a draft interpretive note of guidelines for Virtual Asset Service Providers. Based on this, member jurisdictions requested their monetary authorities to introduce AML legislation on crypto exchanges and other related service providers. In South Korea, these were also put in place to avoid excessive speculation during the bull market of 2017.
In South Korea, efforts have been so far consistent, with the Financial Supervisory Commission working with lawmakers to enact legislation. Last month, they issued a proposal to amend the “Act on Reporting and Utilization of Specified Financial Transaction Information (Special Act)”.
Once the amendment is approved, cryptocurrency exchanges will be required to provide their full analysis of AML data to banks in order to maintain their accounts. This direct control by the state hopes to increase user protection and transaction transparency at crypto exchanges.
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