Global interest in combating illicit uses of virtual assets continues to grow, and South Korea is setting a global precedent with sweeping regulations on its virtual asset industry. Although in line with anti-money laundering and counterterrorism financing recommendations from the Financial Action Task Force (FATF), these regulations failed to provide most Virtual Asset Service Providers (VASPs) with ample registration time, which will likely result in a monopolization of the South Korean virtual asset industry under a select number of VASPs.
Global interest in combating illicit uses of virtual assets continues to grow, and South Korea is setting a global precedent with sweeping regulations on its virtual asset industry.
Following coordination with the FAFT, the South Korean National Assembly amended the “Act on the Reporting and Use of Specific Financial Transaction Information” to require all VASPs to receive Information Security Management System (ISMS) certifications and partner with Korean banks to create “real-name” verified bank accounts for customers. Under the amendment, all VASPs, including foreign VASPs operating in South Korea such as Binance, are required to register with the Korea Financial Intelligence Unit (KoFIU) for license approval within six months, a period that ended on September 24. After the registration deadline, VASP operators who continue conducting business without the license will be subject to criminal and fiscal penalties, including prison sentences up to five years and/or fines up to roughly $42,000. However, the new government requirements involve more than just receiving a proper license as registered VASPs are required to follow anti-money laundering guidelines, including verifying customer identity and filing reports on suspicious and/or large currency transactions.
Read the full article from The Diplomat.
More from CNAS
ReportsSanctions by the Numbers: Transnational Crime and Drug Trafficking
Transnational organized crime poses a significant and growing threat to national security, with direct impacts on public safety and health, democratic institutions, and econom...
By Jason Bartlett & Megan Ophel
PodcastHunger Crisis in Afghanistan
Is it time to stop the freeze of the country's financial assets and donor aid or will that just legitimise the Taliban? Ed Butler speaks to John Sifton, the Asia advocacy dire...
By Alex Zerden
VideoS. Korea, U.S. to Maintain Close Coordination on N. Korea: Analysis
Dr. Go Myong-hyun, an Adjunct Senior Fellow for the Energy, Economics and Security Program at the Center for a New American Security and a Senior Research Fellow at The Asan I...
By Dr. Go Myong-Hyun
CommentaryEstablishing a Humanitarian Financial Corridor for Afghanistan
The international community, led by the United States, must take further action to help the Afghan people without rewarding the Taliban....
By Alex Zerden