South Korea Targets Crypto Money Laundering with New Customer Verification Measures

• South Korea’s FSC tightens customer verification to combat money laundering in crypto.
• Virtual asset exchanges and banks must verify transactions to prevent money laundering risks.
• Real-name accounts for companies and investors will be assigned by the end of this year.

On May 20, South Korea’s Financial Services Commission (FSC) decided to tighten customer identification for non-profit corporations and virtual asset exchanges. This measure is taken to lessen the chances of digital asset investors engaging in money laundering. Banks and virtual exchanges will have to pay special attention to their users’ identification and oversee each transaction more closely.

The guidelines were concluded at the 4th Asset Committee meeting earlier this month. The rules require verifying the money being deposited and withdrawn, and the reason for the move at virtual asset exchanges. Real-name account banks will have to track transactions related to buying and selling virtual assets. These rules are included in South Korea’s broader plan to control participation in the virtual asset market.

Stricter Verification to Combat Crypto Money Laundering

As per this policy, banks and exchanges must regularly review all customers’ addresses, contact information, and representatives. Confirmation will happen annually for most customers, while clients with higher risk profiles will undergo more frequent checks. The purpose is to monitor money laundering risks associated with virtual assets closely. This will make users of digital asset exchanges more responsible.

Related: All Major South Korean Presidential Candidates Support Bitcoin ETFs

Further regulations are on the agenda for South Korea’s financial regulators. By the end of this year, the plan is to assign real-name accounts to companies and professional investors in the industry. This forms part of the next phase in tech companies’ steps toward joining the virtual asset market. The FSC is also planning to introduce more rules for anti-money laundering in the near future.

South Korea Enhances Crypto Regulations

Both the Korea Federation of Banks and the Digital Asset Exchange Association (DAXA) are planning to create rules that reflect these new regulations. The updated guidelines will be sent to both virtual asset exchanges and real-name account issuing banks at the end of May. Because of this joint effort, new policies can be seamlessly introduced into the market.

South Korea made this decision as virtual assets become more popular and included in the economy. The country has actively overseen digital currencies to benefit its people and ensure that finances remain stable. To manage issues with illegal acts in virtual assets, South Korea is improving how it onboards customers and making its oversight stricter.

The government is dedicated to ensuring that transactions of virtual assets are safe and open. This will influence the future of the industry by promoting progress while protecting against wrongdoing.