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AIBC

South Korean banks request pass on crypto fraud

Posted: Jun 29, 2021 07:00 Category: Asia , Crypto , Posted by AIBC Group

This request comes at a time of extreme volatility in the crypto prices as they are increasingly being asked to screen exchanges for authenticity

South Korean banks requested to not be held accountable by the financial authorities for money laundering or other fraud involving cryptocurrencies. They have stalled on issuing real-name accounts for local cryptocurrency exchanges’ virtual asset customers. Recent changes to legislation have made it a requirement for exchanges and banks to partner together when issuing the accounts, making banks responsible for screening AML and KYC related protocols.

A government official said that the South Korean Financial Services Commission was looking to roll out “no-action letters”. These would be directions from members of the government to “not recommend” legal action by the authorities against such entities. This could potentially give banks peace of mind.

“The decision will be finalized and announced by the end of next month.”

south korea financial services commission sign

Why the wait?

As it stands, about 100 minor cryptocurrency exchanges in South Korea will be banned from conducting withdrawals without partnering with lenders by the 24th of September. Only Upbit, Bithumb, Coinone and Korbit have managed this. The internet-only K bank offers real-name accounts for Upbit, while Shinhan Bank has partnered with Korbit. NH NongHyup Bank provides the service for Bithumb and Coinone.

This has left more than half of the certified exchanges scrambling to remove or section several altcoins in the runup to the new policies to take effect.

Korea also plans to start charging a 20% capital gains tax from cryptocurrency transactions next year.

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