Foreign crypto exchanges with Korean won settlement to be under FIU’s scrutiny

2021.07.14 08:55:21 | 2021.07.14 08:55:56

FSC Chairman Eun Sung-soo. [Photo by Lee Seung-hwan]이미지 확대

FSC Chairman Eun Sung-soo. [Photo by Lee Seung-hwan]

Foreign cryptocurrency exchanges allowing traders to settle their transactions in Korean currency must register their business with South Korea’s anti-money laundering body even if they operate outside of the country, a top financial regulator said Tuesday.

Financial Services Commission (FSC) Chairman Eun Sung-soo made the remark when asked by a lawmaker whether Binance, the world`s largest cryptocurrency exchange, should also register with the Financial Intelligence Unit (FIU), Korea’s anti-money laundering office under the FSC, to continue to serve Korean customers like its Korea-based peers.

If cryptocurrency exchanges serve customers with the Korean won settlement, they must register with the FIU under the revised law on the reporting and use of specific financial transaction information, Eun said.

The revised law requires banks to register with the FIU while issuing real-name accounts and meeting other strict rules to prevent money laundering by Sept. 24. Otherwise, their business cannot continue in Korea.

To qualify for registration, crypto exchange operators must hand in Information Security Management System certification. Of over 60 crypto exchanges operating in Korea, just 20 have been certified. They also must allow only virtual coin trading by customers cleared by banks to open real-name accounts for digital coin investment.

Eun said the government will soon send a letter to foreign country-based cryptocurrency exchanges to ask whether their Korean language service has commercial purposes or not.

He also said the FSC is closely working with other government agencies and departments to review cryptocurrency bills drafted by lawmakers for the National Assembly because acts proposed in the bills fall under not only the FSC but also other government departments. Korean lawmakers have come up with a number of cryptocurrency bills to protect crypto investors while fostering the local crypto industry at a time of crypto investment boom.

By Lee Sae-ha and Minu Kim

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