South Korea’s financial regulator is pumping iron with a series of new amendments to approaching crypto regulations – with new anti-money laundering (AML) clauses and a ban on privacy coin trading.
According to Fn News and ZDNet Korea, as well as Paxnet, the regulatory Financial Services Commission’s Financial Intelligence Unit (FIU) – a professional AML team – revealed a detailed set of ordinances to be put in force when the nation’s first crypto-specific legislation declares in March 2021.
In a shock for privacy coin operators, tokens like zcash (ZEC) and monero (XMR) will be formally banned under the new policy, as the FIU declared to eliminate “all forms” of anonymity in domestic crypto trading.
Still, no major South Korean exchanges currently list privacy coins, with monero the last privacy token to be delisted earlier this year. This followed a national backlash facing the tokens, which were determined to have been used by the operators of a brutal “members-only” rape and sexual exploitation video chat room hosted on the Telegram app.
Furthermore, many of the specified provisions cover the same sort of area described in the original bill; one critical development will include the role of banks in the crypto sector.
Present government policies require banks that provide fiat on-off ramp services to customers to make use of “real-name” crypto exchange accounts that are verified with social security numbers and other forms of identification.
These policies will become mandatory next year. But the FIU has added a new layer of regulation, stating that banks will become responsible for running AML risk assessment checks on exchanges (and their customers) – in addition to the AML requirements arranged on exchanges themselves.
In conclusion will hand more power to banks, who currently offer their services to exchanges on a rolling six-month contractual basis.
The FIU’s provisions also include an affirmation that exchanges keep their fiat funds and those of their customers in separate accounts.