South Korea’s Financial Services Commission (FSC) has revealed it is set to establish a virtual asset division within the Korea Financial Intelligence Unit (KoFIU).
According to Regulation Asia, FSC said the new division will be set up within KoFIU and is expected to oversee the adoption and implementation of Financial Action Task Force recommendations on financial activities involving digital assets and virtual asset service providers (VASPs).
The Special Financial Transaction Information Act – which went into effect earlier his year – will require VASPs to register with KoFIU and begin complying with basic anti-money laundering requirements on customer due diligence, real-name accounts and suspicious transaction reporting.
From this, most crypto exchanges in Korea are expected to shut down as the majority of them have been unable to secure partnerships with banks as needed to meet real-name account requirements.
Regulation Asia highlighted that the Korea Times had reported that some banks had arranged partnerships with specific crypto exchanges that enable them to earn commission profits by offering real-name bank accounts.
The new rules are set to take effect next month and additionally target foreign VASPs that deal with Korean customers. This development will require them to secure registration with KoFIU if they intend to continue conduct business that targets Koreans.
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