South Korea’s Financial Regulators Tighten up Guidelines on Crypto Exchange Bank Accounts

South Korea’s financial government bodies have modified the anti-money laundering regulations that affect cryptocurrency exchanges in the nation, demanding local banks to tighten up the supervision of associated bank accounts.

The modification – which will be in place for a year – implies local banks who offer services to crypto exchanges should now keep track of all the accounts held by an exchange, according to a statement from the Financial Services Commission (FSC) on Wednesday.

Generally, there are a number of accounts offered by an exchange with a bank- for instance, a depositing account that contains traders’ funds on the system, along with an operating account that saves the exchange’s personal assets.

Nevertheless, the FSC discussed that its latest assessments at three organizations – Nonghyup Bank, KB Kookmin Bank, and KEB Hana Bank – discovered that some exchanges had relocated resources from investors’ depositing account to their personal operating accounts.

This lead the exchanges to directly defy rules demanding exchanges to keep investors’ resources separate from their own, according to a report from CoinDesk Korea.

Considering the fact that banks

Since banks at the moment only keep track of investors’ deposit accounts at crypto exchanges, the FSC is concerned that the lack of wider account examination may boost the chances of exchanges laundering money or evading taxes by making use of their operating accounts to purchase cryptocurrencies from foreign exchanges.

Consequently, the modification will need banks to watch out for dealings in which exchanges transfer assets to or from foreign exchanges. In the event that shady dealings emerge, the info must be discussed with the FSC