In South Korea cryptocurrency exchanges will be fined for not complying with AML rules
The Financial Services Commission of South Korea (FSC) has introduced new rules according to which cryptocurrency exchanges will be fined for non-compliance with anti-money laundering (AML) rules.
Under the new rules, virtual asset service providers (VASPs), including cryptocurrency exchanges, will be fined if: VASPs do not track and report suspicious transactions; digital asset firms do not store relevant suspicious transaction data; VASP is not capable of performing client transactions work.
South Korea’s financial regulator said the rules will take effect April 20 after public comment. The new standards are focused on the revised law on the provision of information on financial transactions, which will become effective at the end of March.
South Korea has applied strict regulations to the digital asset industry in the past. In 2018, the South Korean regulator ordered local banks to tighten control over the accounts of cryptocurrency platforms. Additionally, from 2023, traders in South Korea will pay 20% income tax if their cryptocurrency trading profits are 2.5 million KRW (about $ 2,200).
With a high degree of probability, the upcoming rules were the reason that the South Korean cryptocurrency exchange Bithumb recently blocked the accounts of traders from 21 countries. These states do not take active action against financial crime, therefore they are under the scrutiny of the Financial Action Task Force on Money Laundering (FATF).
