South Korea’s Financial Services Commission (FSC) works on the relationship between banks and exchanges. Commissioner Choi Jong-Ku recently said that the country’s exchanges can get virtual accounts with the banks. However, the exchanges must stay compliance to the policies of KYC and AML as a condition to have the account.
With the virtual accounts the customers of the exchanges can deposit and withdraw South Korea won (local currency). This type of account offers greater security to investors and allows exchanges to focus on trading in crypto assets. However, some of the biggest Korean exchanges, such as Bithumb, were in conflict with the banks. Therefore, the South Korea Blockchain Association acted in order to secure exchange rights. Now the FSC helps to mediate the interaction by monitoring both parties and articulating the interaction between them.
“There exists no issue in banks providing virtual bank accounts to cryptocurrency exchanges. If digital asset trading platforms have KYC and AML systems in place, there is no problem in issuing virtual bank accounts to exchanges,” said Commissioner Choi, according to a report published by CCN.
The approach of South Korea with the crypto world
South Korea has proved to be one of the most enthusiastic countries in the crypto world. Recently the mayor of Seoul went to know the Crypto Valley to look for possible innovations to be applied in his city. In addition, the country has promoted a national debate about the crypto market by bringing together the National Assembly and members of Congress.
The action of the Financial Services Commission can avoid conflicts such as those occurring in Brazil do not happen in South Korea. A country that wants to structure its financial market needs to oversee both sides and promote free competition. With this well-established relationship, investors wins with a market with more diversified offer. Therefore, its necessary that other countries, and especially Brazil, follow the example of the South Korean market.