- South Korea now requires foreign crypto exchanges to comply with AML.
- The rule applies to all crypto exchanges offering Korean-won trading pairs.
- Also, foreign exchanges need to comply with real-name account trading.
South Korean Regulator says AML compliance is mandatory for foreign crypto exchanges offering services in the country’s KRW currency.
Specifically, South Korea’s Financial Services Commission (FSC) president Eun Sung-soo stated that the requirement to comply with the South Korean Anti-Money Laundering standards now extends to foreign crypto exchanges.
In addition, the foreign exchanges must also comply with real-name account trading and work with banks. At the time of writing, only four exchanges operating in South Korea have complied with real name trading. This is because most banks have been reluctant to work with crypto exchanges citing security fears as their top concern.
Notably, Eun made the clarification while responding to a question about regulating top-ranking crypto exchange, Binance. The crypto exchange giant has been under fire for non-regulatory compliance in several countries.
For instance, Thai regulators filed an official complaint against Binance exchange. Also, countries like Japan, the Cayman Islands, the UK, and others have flagged the exchange for the same reason.
In line with this, Eun noted that foreign exchanges offering KRW-denominated crypto trading pairs need to comply with regulatory rules. In fact, compliance includes registering with the Korea Financial Intelligence Unit. Notably, the unit enforces AML compliance in the country.
Eun’s remarks are a step further in the Asian country’s increasingly tightening crypto regulations. Prior to this, the South Korean government launched an interagency task force to deal with illegal crypto operations. In fact, crypto use in money laundering and tax evasions has become a growing concern.
For instance, South Korean authorities recently discovered $1.48 billion in illegal overseas crypto transfers. So far, investigations have implicated 30 people in the case. As a result, one Korean city, Gyeongju, even went as far as threatening to seize tax evaders’ crypto holdings. Highlighting the need for more consistent regulation on a national level.