Digital currency services providers in South Korea, including crypto exchanges, will be undergoing some sort of restructuring following an amendment passed on March 4 by the Legislation and Judiciary Committee of the National Assembly.
According to a news outlet, Business Korea, the amendment from the committee was explicitly directed towards the Act on Report on and the Use of Specific Financial Transaction Information for Industry-related businesses operating in the country.
If it’s approved today by the National Assembly, every company that provides digital asset service providers or crypto exchanges will have to report their business in accordance with their real-name account offered by a bank.
The amendment put forward that such real-name accounts should be created under stricter requirements and conditions. Cryptocurrency companies and exchange operating without the real-name accounts might be forced out of the South Korean market.
The idea coming from the committee is aimed at curbing virtual asset-based money laundering in the country. Also, it was proposed in line with the Financial Action Task Force’s (FATF) advice, according to the report.
Upbit, Coinone, Bithumb, and Cobit are the only cryptocurrency exchanges in South Korea that are operating with real-name accounts at the moment. Every other crypto-related service provider that fails to report its business with a real-name account will have to face five years in prison or fined with a hefty fee of 50 million won (42,249 USD).
The amendment will be made public and effective a year after the promulgation. Any digital asset service provider established before the implementation date of the bill will file a six months business report from the time of implementation.
South Korea’s Increasing Oversight on Crypto Businesses
The South Korean authorities have been active in making rules that tend to regulate how crypto businesses operate in the country. In August, the South Korea Financial Intelligence Unit (FIU), announced plans to directly involve in supervising digital currency exchanges operating in the country.