Report: South Korea Will Ban High-Risk Privacy Coins
- The Financial State Commission of South Korea will tighten the security around cryptocurrency transacting.
- Crypto companies will now have to introduce the required compliance policies and provide KYC information in order to continue operating in the country.
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On November 3, the National Financial Services Commission of South Korea announced that it will introduce a legislative amendment to the local regulation law in order to ensure that citizens are protected from illicit activities, such as the money laundering of virtual assets.
Moreover, the Commission will be specifically bringing changes into the regulation of the so-called “dark coins”, privacy-oriented currencies, which’s transaction records are specifically designed to be untraceable. This will ensure that all activity connected to cryptocurrency transfers can be overseen for potential threats to users.
“The amendment to the enforcement ordinance stipulates the scope of virtual asset business operators and virtual assets, reporting documents and procedures, standards for opening a real name verification deposit and withdrawal account, and targets and standards for information provision when transferring virtual assets,” the officials stated.
The new changes will mainly affect business entities, whose activities are connected to the buying, selling, exchanging, transferring, storing, and managing of cryptocurrencies. All such brokerages and mediation companies must now first get approval from the financial department of South Korea before continuing to operate.
Along with restricting certain blockchain operators in the country, entities that register as cryptocurrency providers will have to provide sufficient KYC information and report their operations within six months of the law’s implementation. This is said to mostly affect privacy coin ecosystems such as Zcash, Monero, and Dash.
As per the updated Special Payments Act, blockchain companies will have to introduce the required compliance policies and updates to their technology before reinstating operations in the country. Regulations will only be applied to transferring virtual assets equivalent to 1 million KRW (around $880) or more, with transactions not falling under the legal scope when conducted between individuals.
According to the announcement, the Commission will wait for a year before fully imposing the new regulation laws, which are expected to go into effect in March 2021.
- One of the largest South Korean commercial banks, KEB Hana Bank, partnered with crypto custodian BitGo in order to set up a new crypto custody venture in the country.
- The new venture, which will use BitGo’s crypto security expertise and Hana’s experience in financial services and compliance, is expected to launch in the second half of 2024.
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- The now arrested Terraform Labs CEO had reportedly converted the majority of his illicit funds into BTC using foreign exchanged not under the jurisdiction of South Korea.
- While none of the assets tied to Do Kwon were recoverable, South Korean authorities continue to seize assets and properties tied to other executives of Terra.
- A person suspected to be Terra founder Do Kwon was arrested at the airport in Montenegro’s capital city of Podgorica with “falsified documents”.
- South Korean authorities have confirmed the individual was Do Kwon based on “photo data”, name, age, and nationality, but are still waiting for fingerprint information.