South Korea’s Financial Intelligence Unit (FIU) is set to increase its watch over cryptocurrency exchanges starting in 2024. The FIU plans to remove any platforms that are not meeting the standards required for operation in the country, as reported by The Korea Times on February 12.
The FIU is also looking to broaden how it checks the crypto market, aiming to stop unsuitable exchanges from joining the South Korean economy. A new system will be put in place to halt trading on any platforms that show signs of suspicious transactions, even before an investigation begins. The Financial Action Task Force recommends this approach, and 49 countries worldwide are considering it.
Since 2021, the FIU has been responsible for giving licenses to virtual asset service providers in South Korea. As these three-year licenses are renewed in 2024, the FIU will review each exchange’s measures against money laundering, its operational capabilities, and how it protects its customers. Those who do not pass these checks will not be allowed to operate.
This scrutiny comes as South Korea prepares for its Virtual Asset User Protection law, set to start in July, which aims to protect consumers in the crypto market. Rhee Yun-su, the FIU’s commissioner, stated the FIU will make quick and necessary changes to ensure the cryptocurrency industry runs smoothly.
The Virtual Asset User Protection law, passed on June 30, 2023, combines 19 crypto-related bills into one, clearly defining digital assets and penalties for illegal trading activities.
In other news, on February 7, it was reported that the FIU is investigating the crypto exchange OKX for possibly operating without registration in South Korea. On the same day, another regulatory body, the Financial Services Commission, announced that those involved in crypto crimes with over $3.8 million in illegal profits could face life imprisonment.
