Friday, July 30, 2021

Small crypto exchanges operating in South Korea fear closure after new AML guidelines.

The Takeaway:

Hundreds of small crypto exchanges operating in South Korea fear closure as new Anit-Money Laundering rules come into effect.

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South Korean regulators continue to impose strict regulatory policies around the crypto sector. Financial Services Commission (FSC), South Korea’s top regulatory body, is now targeting foreign crypto exchanges using the Korean national Fiat. The chief regulator said any foreign exchange serving Korean customers must register with the country’s anti-money laundering body. Small crypto exchanges are also fearing closure after the new crypto regulations come into place. 

 

New AML guidelines will be implemented in September. 

The new anti-money laundering guidelines were approved in January this year and came into effect in March but were later extended to September, which would require crypto exchanges to have real bank accounts under stricter guidelines. Interestingly, none of the 200 crypto exchanges operating in the country filed for the compliance license under new regulations. Most of them feared closure due to the strict nature of the policy. Most of the small crypto exchanges didn’t bother to register when the first deadline for March came in, claiming it would end their business.

 

Small crypto exchanges fear closure in South Korea. 

Many small crypto exchanges operating in South Korea were found to be involved in using opaque banking methods to lure more customers. A majority of them were using customer’s bank account to facilitate transactions instead of opening original accounts. After September 25, when the deadline for the new guidelines ends, a majority of them fear closure. Over the past few years, South Korea has maintained a strict regulatory policy around cryptocurrencies despite advocating for the use of blockchain. The main concern of Korean regulators around the crypto space is money laundering, and that is the key reason behind the implementation of strict AML policies on crypto platforms.

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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