The Korean government plans to oblige cryptocurrency exchanges to comply with the same requirements imposed on traditional financial institutions by reflecting a set of recommendations adopted by the Financial Action Task Force (FATF) concerning crypto exchanges in Korea’s relevant law.
The Korea Financial Intelligence Unit under the auspices of the Financial Services Commission said Sunday that it would adopt new rules on crypto assets adopted at the plenary meeting of the FATF in Orlando, Florida, last week.
On Friday, the FATF adopted and issued “an Interpretive Note to Recommendation 15 on New Technologies,” the binding international standards relating to crypto assets countries must comply with.
Noting that the amendment of the Act on Reporting and Using Specified Financial Transaction Information reflecting the Interpretive Note and other recommendation standards presented by the FATF is already pending in the National Assembly, the Korean government said the revised bill will go into effect late next year. The amendment is to take effect one year after being approved in the National Assembly. Once the act is revised, the government will use the updated Guidance on Virtual Assets and Virtual Asset Service Providers actively in amending lower statutes.
The Interpretive Note states that virtual asset service providers including crypto exchanges should obtain permission from the regulatory body or report and register with it. Ex-convicts are barred from engaging in virtual asset businesses and undeclared trading is subject to sanctions.
Currently, Korean crypto exchanges are doing business without obtaining permission or undergoing reporting and registration procedures. So the Korean government is expected to enforce regulations based on the set of recommendations by the FATF after the act is amended.
The FATF recommendations oblige exchanges to comply with the Know-Your-Customer rule and report suspicious transactions, anti-money laundering (AML) obligations imposed on traditional financial companies. At the time of transfering virtual assets, both sender and recipient information must be collected and retained; the information also should be offered to the government, if necessary.
The FATF plans to report the international standards relating to virtual assets adopted last week to the G20 summit meeting to be held in Osaka, Japan, June 28-29. /firstname.lastname@example.org
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