The Korea Financial Intelligence Unit (FIU) has declared an intensified crackdown on crypto exchanges in South Korea, signaling the expulsion of "unsuitable" platforms from the market, starting this year.
Ramped-Up Scrutiny on Crypto Exchanges
South Korea's FIU has unveiled plans to bolster oversight on crypto exchanges, aiming to weed out platforms deemed unfit for the local market. The regulatory crackdown seeks to enhance screening procedures and prevent inadequate exchanges from infiltrating the national economy.
Preemptive Measures Against Suspicious Transactions
To combat illicit activities, the FIU intends to implement a preemptive trading suspension system for platforms suspected of facilitating suspicious transactions. This proactive approach, recommended by the Financial Action Task Force, aims to freeze transactions during pre-investigation stages.
Renewal Scrutiny for Licensing Renewals
As licenses for virtual asset service providers approach their three-year expiration, the FIU will rigorously assess exchanges' anti-money laundering measures, operational capabilities, and consumer protection protocols. Exchanges failing to meet the stringent criteria will be denied license renewal.
Preparation for Consumer Protection Legislation
Ahead of the enactment of the Virtual Asset User Protection Act, slated for July, regulatory authorities are conducting comprehensive examinations. Commissioner Rhee Yun-su affirmed the FIU's commitment to instituting necessary institutional improvements to ensure the seamless operation of the cryptocurrency industry.
Unified Legislation for Digital Assets
The Virtual Asset User Protection Act, passed by the National Assembly, consolidates 19 crypto-related bills, establishing a unified framework for digital assets. The legislation aims to curb illicit trading practices, including market manipulation and unfair trading activities, by imposing penalties on offenders.
Crackdown on Crypto Criminals
In tandem with regulatory initiatives, South Korean authorities are intensifying efforts to combat crypto-related crimes. Recent reports indicate investigations into unregistered operations, with the Financial Services Commission warning of severe penalties, including life imprisonment, for crypto criminals.
Amidst mounting regulatory scrutiny, South Korea is positioning itself to fortify its crypto ecosystem and safeguard investors from potential risks associated with the burgeoning digital asset landscape.