As they seek to renew their bank accounts, four South Korean cryptocurrency exchanges are now under stricter regulation, a local industry media TheBchain reportedon July 29.
These new regulations follow the Financial Action Task Force’s recommendations on virtual currency regulations. According to the report, South Korean cryptocurrency exchanges Bithumb and Upbit, Coinone, Coinone, and Korbit have been subject to the new stricter norms in order to renew their banking partnerships as a result of the FATF guidance in June.
New guidance states that crypto asset service providers must comply with Anti-Money Laundering to prevent the financing of terrorist activities in the same manner as traditional financial institutions. Although FATF guidance is not legally binding, it can be a useful tool for countries that have chosen not to follow the new standards. This could lead to them being excluded from the global financial system.
According to TheBchain, these guidelines make banks that provide services to crypto exchanges legally responsible for money laundering. A spokesperson for a Korean trading site commented on the developments:
“To meet this standard, small and medium-sized exchanges are likely to disappear off the market.”
Privacy advocates within the industry were critical of the FATF guidance earlier in this month. The “travel rule,” which requires virtual assets service providers to collect customer information during transactions, was particularly criticized.
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