The Korean Financial Services Commission announced additional requirements for cryptocurrency
On Sunday, the country’s Yohnap news agency reported that South Korea’s government plans to require cryptocurrency exchanges to share users’ transaction data with banks as part of a clampdown on cryptocurrency trading.
Currently, banks in the country are barred from working with cryptocurrency exchanges, a move aimed at curbing, what the government believes to be, an alarmingly high interest in speculative investments.
The Korean Financial Services Commission (FSC) announcement stated that 6 commercial banks including Nonghyup Bank, Industrial Bank of Korea, KB Kookmin Bank, and Shinhan Bank will have the new system in place from January 30, according to the Digital Times. Initially, the system was expected to be implemented around January 20.
Banks are expected to introduce the system, which will require cryptocurrency exchanges to share their users’ transaction data with banks, late this month or early next month preventing any anonymous trading activity, according to an official from the country’s financial regulatory body.
Under the law, banks will be obliged to check whether cryptocurrency exchanges comply with the requirement and tax enforcement.
Cryptocurrency trading in South Korea is highly speculative and digital currencies are often traded at a premium, meaning that they are priced significantly higher in the country’s exchanges than elsewhere in the world.
Following the inspections of 6 major South Korean banks, the Financial Intelligence Unit (FIU) is preparing anti-money laundering (AML) guidelines related to cryptocurrencies.
The country is one of the largest markets for major coins like bitcoin and ethereum.
South Korea’s government is examining multiple options for cracking down on cryptocurrency trading, including a blanket shutdown of cryptocurrency exchanges and a closure of only the ones acting illegally.