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.