South Korean regulator will directly control the operation of cryptocurrency exchanges

The South Korean financial regulator, the Financial Services Commission (FSC), plans to closely monitor the activities of cryptocurrency exchanges.

The Financial Intelligence Unit (FIU) said it will directly regulate cryptocurrency platforms, which are currently indirectly controlled by instructions given to banks, says
in a Business Korea post.

For example, last year, the FSC changed the anti-money laundering rules applied to cryptocurrency exchanges, requiring
from local banks to tighten control over the accounts of cryptocurrency platforms.

FIU Director of Administration and Planning Lee Tae-hoon said the Korean government will create a licensing system for cryptocurrency exchanges in accordance with recent FATF recommendations. According to Lee, this step will increase the transparency of cryptocurrency transactions.

“If the amendment to the Law on reporting and use of certain information on financial transactions, which reflects the international standards of the FATF, is adopted by the National Assembly, it will be possible to prevent money laundering using cryptocurrencies,” Lee explained at a public hearing at the National Assembly.

The adoption of the amendment would make the rules more effective “by moving from current indirect regulation through commercial banks to direct regulation,” Lee added.

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According to the message
on the Argos cryptocurrency company’s blog, the amendment could also lead to the introduction of a controversial rule on the transfer of information. Its essence is that exchanges must exchange information about participants in a transaction when making transactions. This creates a serious problem for exchanges, as cryptocurrency transactions do not include identification data, the message said.