Just-In: Korean Regulators Extend AML Guidelines for Foreign Crypto Exchanges

South Korean regulators continue to impose strict regulatory policies around the crypto space. Financial Services Commission (FSC), the top regulatory body in the country is now targeting foreign crypto exchanges using the national Korean Fiat. The chief regulator said any foreign exchange serving Korean customers must register with the country’s anti-money laundering body.

The comments were made by Eun Sung, the chairman of the chief regulatory body in the country. Sung was responding to a question regarding the compliance of Binance and whether the world’s largest crypto exchange would have to adhere to new regulations being introduced in September.

The new anti-money laundering guidelines were approved in January and came into effect in March, but later extended to September, which would require crypto exchanges to have real bank accounts under stricter guidelines. None of the 200 crypto exchanges operating in the country filed for the compliance license under new regulations and most of them feared closure due to the strict nature of the policy.

Hundreds of Small Crypto Exchanges Fear Closure

Hundreds of small crypto exchanges operating in 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. Most of these small crypto exchanges didn’t bother to register when the first deadline for March came in claiming it would virtually end their business.

South Korea over the past few years has maintained a strict regulatory policy around cryptocurrencies despite advocating for the use of blockchain. The main concern of regulators around the crypto space is money laundering and that is the key reason behind the implementation of strict AML policies on crypto platforms.

South Korea has also proposed a 20% crypto tax on capital gains set to be implemented in the last year. The tax proposal was asked to be delayed by many investors but regulators suggest it would be implemented as planned.