Legal action is being taken to stamp out cryptocurrency exchanges that are unregistered with South Korea’s Financial Services Commission. South Korea takes legal action to close unauthorized Crypto Exchanges.
The National Assembly’s Amendment Subcommittee on Parliamentary Affairs passed a legal amendment, to the still-in-development Special Financial Transactions Information Act, to force virtual asset exchanges to register with the Financial Services Commission (FSC). Those who do not register will face jail time for a maximum of 5 years or incur a maximum fine of 50 million won.
According to the amendment on anti-money laundering guidance by the Financial Action Task Force, cryptocurrency exchanges must have virtual bank accounts.
The opposition legislators announced that exchanges without virtual bank accounts must cease their operations.
In 2018, only the following four exchanges had real-name virtual bank accounts:
Lee Junhaeng, the CEO of the Gopax crypto exchange, stated the changes will bring in a “healthy” market with a fair system.
The cryptocurrency-based industry would come out of the ill-defined regulatory areas and join the system as authorized banks.
Jae-Jin Kim, the general secretary of the Korean Blockchain Association, said:
“It is expected to be the first step in the development of consumer protection and a stable market.”
The report says the National Assembly will pass the act with the latest amendment soon. The new amendment may go through further changes after reviews from other government entities.