South Korea’s Financial Services Commission (FSC) announced on Tuesday its decision to ban privacy-centric digital currencies that possess a high-risk of money laundering. The regulator has added these new guidelines in its existing under the Special Payment Act, which specifically covers the legality of cryptocurrencies in South Korea. The new rules will come into force in March next year, barring all domestic cryptocurrency exchanges from offering services with such privacy coins.
The ban will affect privacy coins, including Monero, DASH, and Zcash.
This ban will affect the circulation of some of the popular privacy-centric coins, including Monero, DASH, and Zcash. Furthermore, the South Korean regulator will mandate the KYC and AML policies on all domestic cryptocurrency exchanges, and they have to confirm the users’ real names by verifying them against their personal identities. Additionally, the crypto exchanges need to report their operational activities with the Korean regulator. Circulation of privacy-centric is now being regulated, but the hostility against these cryptocurrencies was already prevalent in South Korea.
South Korean crypto exchanges are already delisting privacy coins.
Several South Korean crypto exchanges are already delisting privacy cryptocurrencies due to prevailing international regulations. The South Korean arm of OKEx delisted Zcash, Monero, DASH, Horizen (ZEN), and Super Bitcoin (SBTC) in September 2019, citing the Financial Action Task Force guidelines. But, the platform had later suspended the delisting process of Zcash and Dash. South Korean crypto exchange Upbit delisted and ceased the trading of several cryptocurrencies, including three privacy-centric coins, due to money laundering concerns. Privacy coins are alleged to be mostly used for nefarious activities around the world as they are tougher to trace by police. International regulators like FATF has also highlighted the dangers of privacy-centric coins.
