The new bureau will fall under the anti-money laundering agency and will monitor the industry for any suspicious transactions and enhance investor protection.
The Financial Services Commission reportedly plans on denying 11 local exchanges approval to serve the South Korean market as it seeks to implement stricter regulations for the digital currency industry.
Under the Specific Financial Information Act, any exchange operator that continues to operate past the deadline without registering is liable for a five-year jail term.
The head of the Financial Services Commission said that these exchanges must comply with the revised laws that requires exchanges to establish banking relationships and verify users’ identities.
New rules being implemented by the Financial Services Commission are reported to be causing significant worries for smaller digital currency exchanges in the country.
The new rules will impact on some 60 unauthorized exchanges in the country, as well as forcing banks to regard digital currency exchanges as “high risk” clients in their dealings with the sector.
In its latest, aside from banning cross trading activities, the Financial Services Commission has ordered the exchanges to store at least 70% of their customer deposits in cold wallets.
Employees of the Financial Services Commission who deal with digital currencies must file reports on their personal digital currency holdings.
Senior officials in South Korea have approved measures that will introduce a raft of new anti-money laundering provisions for digital currency companies.
The Financial Services Commission has brought forward a new structure of penalties for exchanges that fail to properly implement anti-money laundering measures.
Digital currency service providers in South Korea will no longer be able to support digital assets that present high money laundering risks—notably privacy-centric dark coins—starting March 2021.