South Korean authorities tighten grip on crypto regulations in the country

Written by: Ali Raza
April 19, 2021
  • The authorities have planned to intensify regulatory efforts to combat money laundering and financial crimes.
  • All crypto exchanges and financial institutions are expected to monitor and report irregular transactions.
  • Despite the crackdown, interest in cryptocurrencies still surges in the country.

South Korean regulatory authorities recently met to discuss a clampdown on illegal cryptocurrency transactions in the country.

The focus of the discussion is the potential use of cryptocurrencies in money laundering as well as the volatility of digital assets.

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The report about the joint meeting revealed that the South Korean government is planning to introduce strict rules to guide cryptocurrency transactions in the country. As a result, the country’s Financial Services Commission (FSC) has issued directives to crypto exchanges and other financial institutions to improve on their monitoring activities. The idea is to curb the use of digital currencies for financial crimes.

Flushing out illegal activities

The crackdown is coming amidst the growing incidence of criminal activities surrounding cryptocurrencies following the ongoing boom within the industry.

Head of the office for Government Policy Coordination, Koo Yun, commented on the development, stating the relevance of a coordinated effort against criminal activities in the sector.

 “There is a need to pay special attention to the occurrence of illegal activities using virtual assets,” he commented.

The FSC has already set things in motion for the crypto exchanges in the country to improve on the monitoring of cryptocurrency withdrawals on their platforms. The commission added that any suspicious activity within the platforms should be reported immediately for further investigation and subsequent action.

The decentralized nature of cryptocurrency transactions has led to an increase in financial crimes within the industry. In some cases, the perpetrators prefer using crypto assets as a means of payment for illegal and fraudulent activities.

Interests in crypto still surge in the country

Other regulatory institutions like the Financial Supervisory Service and the Finance Ministry also have plans to monitor cross-border cryptocurrency transactions.

The crypto industry in South Korea has been under strict regulatory watch after the new regulatory law was imposed in March. The law mandates local crypto exchanges to team up with local banks to provide compulsory real-name account trading. But the law has not hampered the trading of crypto assets in the Korean market as interest in Bitcoin and other digital assets continue to surge.