Overseas Crypto Exchanges Are Refraining from Doing Business in South Korea

The deadline for cryptocurrency exchanges targeting South Koreans to register before the country’s financial watchdog and getting a license under the new rules is looming. However, overseas crypto exchanges seem to be distancing themselves from the situation. According to The Korean Herald, by September 24, these firms must register with the South Korean anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term authority to comply with the stricter measures.

For example, US-based crypto company Bitfront, founded by the messaging app Line announced it will stop providing services to South Korean residents starting September 14, 2021, citing such upcoming regulations. Moreover, they clarified that Korean-issued credit card transactions would not be processed through its gateways.

But, the scenario for domestic crypto Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term is even more pessimistic, as reports from local media outlets, Hankook Ilbo and Hankyroreh, noted that several firms failed to pass their regulatory consulting audits ahead of the deadline. In fact, it is not surprising news because local authorities found in July that some exchanges were allegedly using fraudulent banking operations.

Lacking Proper Anti-Fraud Systems

According to the new rulings supervised by the Financial Services Commission (FSC), banks working with crypto exchanges should issue accounts with customers’ real names to prevent money laundering. Also, in the recent audit, supervisors highlighted that these scrutinized exchanges did not have proper standards for listing or delisting tokens whatsoever, lacking anti-fraud systems that could prevent price manipulation, an element of high interest for the South Korean authorities to tackle down.

Recently, as Finance Magnates reported, South Korean commercial banks are likely to see local cryptocurrency exchanges with ‘too many’ coins in offerings as high risk, which might deplete their chances to receive real-name account services. In April, the risk assessment guidelines drafted by the Korea Federation of Banks, a body of commercial and real-estate lenders, showcase the South Korean banks’ stance towards cryptocurrency exchanges. The banking body has 22 full members and 36 associate members.