The South Korean government has officially issued two sets of previously promised guidelines, which have specific measures to regulate the cryptocurrency.
In addition the details of the new real name system for stopping the anonymous trade by the crypto-authorities, the government also published its recommendations on combating money laundering for banks providing services for the exchange of cryptocurrencies.
On Tuesday, the government of South Korea officially issued a document containing guidelines for encryption rules that were previously promised. The Deputy Chairman of the Financial Services Commission Kim Jongbuement made this declaration.
This document details the government's special measures to eliminate virtual currency speculation, which were first announced on December 28. In addition, the government also announced its anti-money laundering guidelines, prepared by the Korean Financial Intelligence Unit, the FSC unit, for all banks involved in crypto-currency accounts on Tuesday.
Convert to real name system
Much of the government's special measures relate to the new real-name account system authorized by the government. This system will replace the existing practice of banks in the issue of virtual accounts. Virtual accounts are issued by banks for clients of exchange rates of crypto-currencies for use for depositing and withdrawing money.
On January 30, the real name system will live for operations on withdrawing and withdrawing funds from crypto-currency accounts. At that time, existing virtual accounts will be converted to real names. Six large banks will introduce a new system.
Customers need to open an account with the bank, providing the services of a virtual exchange account, which they use. "New members should be added after strict identification procedures," Kim Jonggun Ilbo said. According to the document:
The Users who dón't have an account in the same bank as the virtual bank will not have a possibility to make additional payments to the virtual bank but they can withdraw money ...
Aliens and minors under Civil Law cannot use a deposit with a real name and withdrawal services.
Earlier this month, the FIU and the Financial Supervision Service (FSS) conducted on-site inspections of six major banks in the country to ensure compliance with their obligations to combat money laundering. The FIU then established a set of guidelines for combating money laundering, which was published on Tuesday.
Crypto exchange usually separate their funds from users' funds. Nevertheless, government inspections showed that "it was discovered that some exchanges raised funds from users through general corporate accounts opened with banks," Kyunghyang Shinmun reports.
In some cases, customer funds have been transferred to the bank accounts of representatives of exchanges. One exchange "raised funds from users through four bank accounts" to the company's account and spent 58.6 billion won, "the Newsline added. The financial authorities noted that this could lead to fraud and embezzlement.
Hankook-Ilbo clarified that banks should "monitor exchange offices [they serve] for unusual transactions in accordance with the guidelines and, if they are suspected of money laundering, reaffirm the purpose of the transaction and the source of funding," adding that:
If the transaction amount exceeds 10 million KRW per day, more than 20 million KRW within 7 days or frequent transactions occur within a short time, this should be reported to the FIU, the money laundering monitoring body.
If the exchange has a big risk of money laundering or requires information, the bank may terminate the transaction.