South Korea’s primary financial regulator has confirmed upcoming inspections of three major domestic banks that provide services to cryptocurrency exchanges over their compliance with new AML norms.
In a statement on Monday, the Financial Services Commission (FSC) said it will be conducting on-site inspections of Nonghyup Bank, Kookmin Bank and Hana Bank between April 19 and April 25 to scrutinize their adherence to newly introduced anti-money laundering (AML) and know-your-customer (KYC) rules. Joining the FSC is the Korea Financial Intelligence Unit (FIU), a watchdog with the mandate to prevent money laundering and illegal financial flows.
NongHyup Bank, in particular, is notable for servicing Coinone and Bithumb, two of South Korea’s largest cryptocurrency exchanges.
As reported previously, South Korean regulators moved to ban anonymous cryptocurrency trading through anonymous virtual bank accounts offered by domestic banks. The move saw at least six banks issuing new trading accounts for cryptocurrency transactions with new measures that mandates a matching real name between the trader’s bank account and the crypto-exchange account. On January 30, the ban on anonymous trading kicked in and multiple banks began to offer accounts that complied with the new KYC-mandate.
With its inspection, the FSC and the FIU said they would focus on a number of details including checks on the number of trading accounts syncing with the exchanges and their respective deposits, their trading volume and more alongside checking for AML adherence.
The FIU also moved to urge other financial institutions to conduct their own inspections and audits to ensure compliance to new rules.
While anonymous trading accounts switch over to real-name accounts in the country, Korea’s government is also drawing up a cryptocurrency taxation framework that is expected to be made public come June this year. The government is expected to begin taxation in 2019.
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Last modified: May 20, 2020 8:53 PM UTC