The new amendment requires crypto exchanges and service providers in South Korea to register with the country’s financial regulator and comply with the FATF guidelines. Failing to report and register as digital asset businesses with the FSC’s Financial Intelligence Unit would result in hefty penalties.
South Korea regulates cryptocurrency.
South Korean National Assembly’s national policy committee passed an amendment to the Act on Reporting and Using Specified Financial Transaction Information on Tuesday. According to the Dtoday report, the bill will establish a legal foundation for virtual currencies by categorizing them as digital assets.
The country’s financial regulator Financial Services Commission (FSC) said that the legislative move would enhance the transparency of crypto transactions while fulfilling international standards.
Crypto exchanges will have to comply with FATF guidelines.
Crypto exchanges and service providers in South Korea will have to comply with the guidelines issued by the Financial Action Task Force earlier this year. The crypto community criticized the proposed guidelines as they force exchanges to collect users’ information and share it with others.
The FSC explained that the bill requires crypto businesses to prevent money laundering and set ground rules for financial transactions. Violating reporting obligations can result in imprisonment of up to 5 years or fines of up to 50 million won.