TL;DR Breakdown
- South Korean authorities have asked crypto exchanges to adopt AML or Anti-money laundering policies.
- If exchanges fail to partner up with South Korean banks, they will have to shut down their operations.
- A deadline of September 24th has been given for all crypto exchanges in South Korea to comply.
The South Korean government has cleared its stance on cryptocurrencies. It will adopt crypto but in a manner that will prevent money laundering and other crypto-related scams. The government asked every crypto exchange in the country to adopt the AML or Anti-Money Laundering policies by September 24th. Commercial South Korean banks think that only the four biggest crypto exchanges will survive after September 24th.
According to the instructions ruled out by the authorities, it will not be possible for crypto exchanges to keep operating in the country after the given date if they do not comply with the new set of rules along with partnering up with an approved bank in the country.
According to the new set of rules, all the cryptocurrencies will have to hold their fiat in ramp bank accounts that will be opened with their partner banks.
The movements of digital assets and fiat will be strictly monitored in order to prevent any kind of illegal behavior. For now, only the four biggest exchanges that operate in the region have been able to provide these services.
These four exchanges include UpBit, CoinOne, Korbit, and Bithumb. Except for these exchanges, others have not been able to find South Korean banks to partner with.
Crypto exchanges are not able to partner with South Korean banks
South Korean banks as well as exchanges are not happy with this rule imposed by the government. Many commercial banks in South Korea are not willing to partner with crypto exchanges, and there is a good reason behind this fact.
It has also been ruled out by authorities that South Korean banks will have to bear the burden of money laundering or any fraud that will be happening on these exchanges.
Hence, any commercial bank looking to partner with crypto exchanges will have to bear the risks involved and will have to do its own background checks. To minimize unnecessary risks, banks have shut off the chances of partnering with exchanges. Thus, it is expected by major banks that except the big fours, all other exchanges will wither off.
