South Korea tightens controls over accounts with cryptocurrency exchanges

The financial regulator of South Korea has changed the rules of combating money laundering, which apply to cryptocurrency exchanges in the country and ordered local banks to tighten control over their accounts.

According to the statement of the financial services Commission of South Korea (FSC), the new rules relating to the activities of cryptocurrency exchanges will initially operate during the year.

Traditionally stock exchanges open several accounts in a Bank Deposit where funds are kept traders on the platform as well as operating that stores the own assets of the exchange. According to the amendments, banks that serve the exchange, are required to control the movement of these funds and to inform the FSC of any suspicious transactions.

Innovations appeared after checking three local exchanges, Nonghyup Bank, KB Kookmin Bank and KEB Hana Bank, which showed that some of the exchange transferred assets from the Deposit account investors in a private transaction accounts, directly violating rules requiring it to keep the investor’s assets separately from its own.

Because the banks control of Deposit accounts of investors on the stock exchanges, the FSC is concerned that the absence of a more precise control over accounts can increase the possibility of participation of exchanges in money laundering or tax evasion, through the use of operating accounts for purchase of crypto-currencies on the international markets.

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