Cryptocurrencies Among Nine Major Risk Factors For Money Laundering In South Korea

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Cryptocurrencies Among Nine Major Risk Factors For Money Laundering In South Korea

A job of a regulator is not just to facilitate a business-friendly environment but also to keep a tab on malicious activities that spoil the environment. Exactly what the South Korean regulators are doing with cryptocurrencies. Despite providing a friendlier environment to cryptos, the regulators have added cryptocurrencies to a recently released list of 9 major risk factors for money laundering.

South Korea’s list in compliance with International body FAFT

According to the report released by a Korean Daily, Money Today, the South Korean Government has begun preparations for the mutual evaluation by the international body Financial Action Task Force (FAFT) which is a global body that overlooks and helps nations towards developing policies to combat money laundering and terrorism financing.

From January next year to February 2020, South Korea is expected to receive a FATF evaluation on anti-money laundering and anti-terrorism funding operations. If the evaluation is negative, it may affect the credibility of the country, the financial cost of the export company, and the exchange rate.

Hence, the government said that it conducted a domestic money laundering and terror financing risk assessment from 2017 to August 2018 and found that the risk of terrorist financing was relatively low but confirmed nine major money laundering risks.

Apart from cryptos, the other eight items that included on the list as risk factors for money laundering are Tax evasion, Illegal gambling, Financial fraud such as voice phishing, Corruption crime (arrest, bribery, arrange, etc.), Unfair transaction such as stock price manipulation, Escape from property using trade transaction, Embezzlement and Fiat cash transactions.

A financial official working very closely on this list was quoted saying by the local media (loosely translated from Korean using Google Translate)

“The actual performance of how the money was laid off and sanctioned through the anti-money laundering system is also an important evaluation item. It is necessary to actively detect and sanction money laundering risk activities. “

Many analysts believe, being on the vigilance list would be actually beneficial for cryptocurrencies in Korea, as FAFT is focused on how effectively the system for money laundering and terrorist financing prevention is operating in a country and this will help South Korean regulators to cover aspects that were left out, in order to make the regulations more vigilant and also help to clean the environment from malicious aspects of business.

South Korean regulators have been vigilant enough on cryptocurrencies so that the innovation that is slowly becoming part of the society, is not misused in any way.  A clever way regulates cryptocurrencies.

Should regulators in other countries follow the footsteps of South Korea?  Do let us know your views on the same

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South Korean Regulators Remain Vigilant Towards Cryptocurrecnies Even While Promoting Friendly Policies
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A job of a regulator is not just to facilitate a business-friendly environment but also to keep a tab on malicious activities that spoil the environment. Exactly what the South Korean regulators are doing with cryptocurrencies. Despite providing a friendlier environment to cryptos, the regulators have added cryptocurrencies to a recently released list of 9 major risk factors for money laundering.
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Author: Nilesh Maurya

Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.

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Nilesh Maurya 687 Articles

Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.

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