TL;DR Breakdown
• FIU only wants to prevent cryptocurrency fraud on illegal platforms.
• The Upbit registration could motivate the other crypto exchange platforms.
The largest cryptocurrency trading platform in South Korea, Upbit, is the first to send a request to the Korean Financial Intelligence Unit. This crypto exchange is one of the most used by South Koreans.
For months the cryptocurrency platforms in the country have been stalked by the FIU regulators. Faced with these regulatory policies against crypto, Upbit reported its crypto assets to the South Korean Finance Unit. In this way, Upbit could be approved to work within the country.
Announcements from Upbit about the FIU petition
The Upbit spokesperson stated last Friday it would negotiate with FIU regulators. The crypto platform is one of the most used in South Korea, accounting for up to 80 percent of the country’s digital currency transactions.
Doh Gyu-Sang, the financial services commission vice president, said he plans to accept crypto platforms reports. The FSC agent hopes that various crypto platforms will submit their reports before the end of August.
Officials in South Korea require all domestic cryptocurrency exchanges to record their digital asset traders by September. These regulators have set the 24th of September as the deadline for all crypto platforms to be registered as merchants. If they do not comply with the registration, these crypto companies could be banned in the country.
Crypto platforms must register with the FIU and indicate a banking ally to report the income and users’ identities. The Upbit platform was the first to register and took K Bank as a banking ally.
Cryptocurrency platforms not agreeing to FIU registration
While Upbit supports regulations imposed by regulators in South Korea, other crypto platforms appear to disagree. Several low-profile crypto platforms such as Bitsonic and CPDAX have announced that they will stop operating in the national territory due to the imposed measures. But some small crypto platforms hope to meet the requirements to register with the FIU and put the chases aside.
An FSC agent said that the purpose of this registration is not to ban cryptocurrency trading for South Koreans. The FSC only wants to increase security in crypto transactions to avoid illegal acts such as money laundering, theft, or scam with digital assets.
Perhaps many of these crypto platforms that stopped operating in the country had a history of fraud exposed by registering with the FIU. The purpose of registering crypto platforms in South Korea will demonstrate that crypto regulations should not be aggressive.
