The Financial Intelligence Unit (FIU), South Korea financial agency that operates under the country’s Financial Services Commission (FSC), is planning to supervise the cryptocurrencies transactions more closely.
The organ has recently stated that it will regulate directly the cryptoassets trading platforms. According to the Business Korea report, they are currently indirectly controlled through guidance given to banks.
In the document, the Director of management and planning of FIU, Lee Tae-hoon, stated that the Korean government will establish a licensing system for exchanges, as recently recommended in new international standards issued by the Financial Action Task Force (GAFI). According to him, the measure would increase the transparency of cryptocurrency transactions.
“If an amendment to the Law on Reports and Use of Certain Information on Financial Transactions, which reflects the international standards of the FATF for exchanges is approved by the National Assembly, it will be possible to prevent money laundering through cryptocurrencies”, Lee explained in a public hearing about crypto transparency at the National Assembly.
South Korea regulation in cryptocurrencies seeks to increase transparency
According to Lee, the approval of the amendment in South Korea would make legislation more effective, changing from the current indirect regulation through commercial banks to direct regulation.
In addition, according to a post on the blog of Argos, the amendment can also bring the controversial “travel rule”. This means that the scholarships would have to share information about the parties when making transactions. In this way, it would represent a major problem for exchanges, since crypto transactions do not include identification data, states the post.