Banks in South Korea Instructed to Treat Crypto Exchanges as High-Risk Clients

Banks will have to deny services to clients that do not comply with ID verification requirements or fail to report suspicious activity to the FSC's anti-money laundering unit.

Jun 14, 2021 at 10:23 a.m. UTC

Updated Sep 14, 2021 at 1:10 p.m. UTC

South Korea's banks have been instructed to treat crypto exchanges as high-risk clients by the country's financial regulator.

The Financial Services Commission (FSC) said crypto exchanges must be subject to strengthened transaction monitoring and ID verification, the Korea Times reported Sunday.
Banks will be required to deny services to clients that do not comply with ID verification requirements or fail to report suspicious activity to the FSC's anti-money laundering unit, the Korea Financial Intelligence Unit.
Exchanges will have to terminate transactions made by accounts that are not real-named based or have not been verified using the necessary identity checks.
Of 60 exchanges in the country, only four are using real-name accounts that meet this standard, according to the Korea Times.
This latest statement of intent by the FSC around stricter regulation of the crypto industry comes as exchanges have until Sept. 24 of this year to register as virtual-asset service providers (VASPs) for the regulator to then assess the legality of their operations.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.