Regulators in South Korea have told the country’s banks to disclose details of their dealings with local digital currency firms, in a bid to tighten regulatory control of the sector.
Authorities are reportedly trying to identify how many digital currency exchanges are operating within the country. The undisclosed regulatory agency has said banks must divulge the details of exchanges that have yet to implement real-name accounts for digital currency users.
According to The Korea Herald, only the four largest exchanges in the country have implemented the measures so far, while the remainder have yet to declare their hand, and are thought to be operating under the gaze of regulators.
An exchange official told South Korean news outlet that digital currency exchanges were currently operating without the approval of the government, making it difficult for authorities to see the full picture of the industry.
However, the official suggested that by applying pressure to the country’s banks, regulators could obtain a better overview of the state of play in the sector.
“Currently, cryptocurrency exchanges can operate without permission from the government, which is why it is difficult to identify the exact number of cryptocurrency exchanges. One way to find out is to track corporate bank accounts that collect customers’ funds.”
There are thought to be over 100 digital currency exchanges operating in South Korea which have not yet been identified by the government. Exchanges have until September 24 to register with the authorities, or face penalties under the Act on Reporting and Using Specified Financial Transaction Information.
The act also includes provision for jail sentences for any corporate officials failing to meet the requirements, with up to five years behind bars available for the most significant breaches.
The revised laws are part of a wider clampdown against the digital currency sector in South Korea, with several government agencies keen to regain control of the emerging industry.
See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers
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