The South Korean financial regulator has amended the anti-money laundering regulations, which regulate the activity of the Cryptocurrency exchanges, thus tightening control over their bank accounts. This is written by CoinDesk with reference to the statement of the Commission on Financial Services, published on Wednesday.
According to him, the amendments, which will initially be valid for 1 year, require that banks servicing the cryptocurrency exchange supervise the movements on all their accounts.
Usually, the Cryptocurrency exchange holds several bank accounts at once. One can be used to store user funds, and the other – of operating assets. As the regulator notes, in the course of a recent inspection in all three banks – Nonghyup Bank, KB Kookmin Bank and KEB Hana Bank – transactions of the cryptocurrency exchanges were identified, which moved funds between investor and operational accounts.
Such operations are a direct violation of the instructions of the regulator, according to which exchanges must keep user assets separately from their own. Since banks are currently monitoring only investor accounts, the regulator fears that the Cryptocurrency Exchange may launder money or evade taxes by using its operating accounts to purchase cryptocurrency at foreign sites.
Thus, the regulator requires that banks monitor all transactions that can be used to enter and withdraw funds from foreign trading platforms. Any suspicious activity should be reported to the authorities.
In January, the Financial Services Commission demanded that all South Korean cryptocurrency exchanges transfer their users to accounts verified with real names.