Bitcoin Tumbles As South Korea Bans Anonymous Crypto Trading
by Ricky Makan Co-Founder at Unkrypted
The South Korean government formally publicized a document enclosing the guidelines for the regulations of cryptocurrency on Tuesday (23rd January 2018). The announcement was made by Kim Yong-bum who is the Vice Chairman of the Financial Services Commission (FSC).
The document explains the government’s special measures for the exclusion of virtual currency speculations which was first declared on December 28. In addition, the government also announced its anti-money laundering (AML) guidelines, for all banks and exchanges dealing with cryptocurrencies. The Anti-Money laundering guidelines are prepared by the Korean Financial Intelligence Unit (FIU).
Adapting to Real-Name System
A major part of the government’s special measures focuses on the new government authorized account systems with a real name. This system will re-establish banks’ existing practice of virtual account issuance. Currently, through the virtual accounts (which are issued by banks for cryptocurrency exchanges) customers can deposit and withdraw money.
The real-name system will be live for deposit and withdrawal services to cryptocurrency accounts on January 30th. Active virtual accounts will be changed to real name accounts at that time. Six major banks will execute the new system including Shinhan Bank, Kookmin Bank, Nonghyup Bank, Gwangju Bank and Hana Bank. Clients need to open an account at the bank which is presently providing virtual account services to the exchange they are using. New members will be added after stringent identification procedures.
According to the document:
“Users who do not have an account at the same bank as the virtual bank will not be able to make additional payments to the virtual bank accounts, but they can withdraw money…Foreigner and minors under the Civil Law cannot use real name confirmation deposit and withdrawal account service.”
ML and Suspicious Transaction Reporting
Earlier this month, the FIU and the Financial Supervisory Service (FSS) carried out on-site inspections of the country’s 6 major banks to make sure that they have fulfilled their anti-money laundering compulsions. The FIU afterward twisted a set of anti-money laundering (AML) guidelines which were also released on Tuesday.
Crypto exchanges usually separate their funds from the users’. However, the government’s assessments exposed that some exchanges are collecting funds from users through their general corporate accounts which were opened at banks. In some cases, clients’ funds were transferred to the accounts of the exchanges’ representatives. One of the exchange collected funds from users through four bank accounts and spent 58.6 billion won from it. The monetary authorities noted that this can lead to fraud and cheating.
The Hankook-Ilbo reported that “In agreement with the government guidelines, banks should monitor the exchanges and their service for any odd transactions and if suspected of money laundering they need to confirm the transaction purpose and funding source.
“If the transaction amount is more than KRW 10 million per day, more than KRW 20 million for 7 days, or frequent transactions occur in a short time, it should be reported to the FIU which is the money laundering monitoring authority. The bank can terminate the transaction if the exchange has a high risk of money laundering.”
Created on Jan 25th 2018 07:39. Viewed 161 times.