In South Korea, regulators have reportedly targeted cryptocurrency exchanges for compliance with stricter rules, following new recommendations from the Financial Action Task Force (FATF), an intergovernmental organization founded on the initiative of the Group of Seven (G7) to combat money laundering.
According to a report by Cointelegraph, four cryptocurrency exchanges in South Korea — Bithumb, Upbit, Coinone, and Korbit — must comply with new regulations when renewing their bank accounts.
The tighter regulations were implemented following the FATF’s virtual currency guidance released in June 2019. The organization’s objectives include setting standards to combat money laundering, counter financing of terrorism, and supporting the implementation of these standards.
As a result, the crypto exchanges in South Korea are among the first to face tighter controls in line with those faced by traditional banking and financial institutions.
Though the FATF recommendations are not mandatory, the guidance is generally adopted by nations that do not want to risk contravening the regulations of other countries in the international financial community.
Local South Korean news agency, TheBchain, revealed that any Korean financial institution that offers services to a crypto exchange is now also legally liable should a money laundering case implicate that exchange.
According to a statement made by U.S. Treasury Secretary Steven Mnuchin, “By adopting the standards and guidelines agreed to this week, the FATF will make sure that virtual asset service providers do not operate in the dark shadows.”
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