South Korea’s Banks Will Undergo Cryptocurrency Compliance InspectionApr 11, 2018, 7:49AM
Three of South Korea’s largest banking institutions will undergo inspections in April to ensure the banks are compliant with new anti-money-laundering regulations.
South Korea’s Financial Services Commission (FSC) and Financial Intelligence Unit (FIU) will be conducting on-site inspections of three South Korean banks in mid-April. The checks will assess the banking institution’s level of compliance with recently introduced anti-money laundering (AML) and know-your-customer (KYC) regulations.
In a statement issued Monday, the FSC named the three banks being questioned as Nonghyup Bank, Kookmin Bank, and Hana Bank. Nonghyup Bank is of particular interest to the Korean crypto-market, as the institution provides essential verification services to Coinone and Bithumb, two of the country’s largest cryptocurrency exchanges. Along with AML and KYC compliance, the institutions will be asked to provide details about the number of trading accounts they are syncing with cryptocurrency exchanges, and the amount of deposits associated with these accounts.
In January 2018, South Korean regulations were overhauled, removing a previous system in which investors could hold virtual accounts and trade cryptocurrencies anonymously through domestic banking institutions. The newer regulations require all investor’s identities to be verified by the overseeing financial institutions, lending more legitimacy and accountability to South Korea’s cryptocurrency market.
The three institutions under inspection are major banking institutions within the country and are setting a precedent for compliance within South Korea’s evolving crypto-regulation framework. Kookmin Bank is South Korea’s largest financial institution and was one of the first to comply with emergency regulations issued by the government in January, terminating all Bitcoin services for investors at that time. The FSC’s upcoming inspections are indicative of a growing relationship between the crypto-sphere and traditional financial systems in South Korea and represent a necessary step for the large-scale adoption of crypto in the region.
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