- South Korean crypto exchanges have been put on notice.
- The FIU announced stringent proposals against ‘ineligible’ exchanges.
- The proposals will be implemented starting this year.
In a decisive move, the Financial Intelligence Unit (FIU) has proposed plans to expel ‘ineligible’ South Korean crypto exchanges starting this year.
The FIU announced the proposal on February 12 as part of its ‘2024 Work Plan.’ The development came when virtual asset exchanges that gained the government’s approval three years ago were set to renew their registrations in the year’s second half.
New Rules for South Korea Crypto Exchanges
According to a local media report, the FIU plans to strengthen scrutiny and inspection of virtual asset exchanges in preparation for implementing a comprehensive crypto framework under the Virtual Asset User Protection Act in July.
Sponsored
As part of the plan, the FIU seeks to screen South Korean crypto exchanges to assess their money laundering risks, user protection measures and won market operation capabilities. Exchanges that fall short of certain standards following the inspection will be deemed ‘ineligible’ and expelled from the country.
Simultaneously, the FIU will attempt to block ‘unfit’ virtual asset exchanges from entering the domestic market by expanding the scope of screening targets.
“We plan to expand the scope of report review from business operators and executives to major shareholders, expand the scope of the law to exclude those with a history of violation among the review requirements, and add social credit requirements such as default on debt,” the FIU stated.
The FIU further proposed introducing a preemptive trading suspension system recommended by the Financial Action Task Force (FATF). Per the report, the system ‘promptly detects crimes’ by suspending suspicious transactions at pre-investigation stages.
Sponsored
Read why South Korea wants to screen crypto executives:
South Korea Wants Crypto Executives Vetted Starting in March
Stay updated on South Korea’s crypto user protection laws:
South Korea Threatens Crypto Criminals with Life Sentence
