In that year, South Korea became one of the main markets for crypto-currency, yielding, probably, only Japan and China. Therefore, it is not surprising that the government was forced to deal with the regulation of a new industry that gained popularity in just a few months, after the outflow of traders and start-ups from China.
The Financial Services Commission of South Korea (FSC) announced on September 3 that it plans to begin work with crypto-currencies. “Korea joins Japan, China and other Asian countries trying to regulate the crypto-currency industry,” Yonhap news agency reported. The message also says that while crypto-currencies are not considered a financial product and their exchange is in fact not regulated.
FSC reported that it “will intensify surveillance and conduct research on money laundering, unauthorized financing and other illegal transactions with digital currencies“. FSC noted:
“The government needs to pay attention to crypto-currencies to prevent their use as tools for committing crimes and speculation.”
One of the measures discussed is the strengthening of procedures for verifying the identity. “Banks will need to strictly check the personal information of people working on crypto-exchange exchanges,” the FSC representatives note. “If there are suspicious transactions on their bank accounts, banks should report such transactions to the authorities.”
Banks that work with crypto-exchange exchanges should be very careful to ensure that exchanges have effective internal control procedures, such as user identification. Banks will consider closing their accounts if the exchanges fail to provide reliable information.