South Korea To Investigate Banks Over Cryptocurrency Accounts.
Legal News & Analysis - Asia Pacific - South Korea - Regulatory & Compliance - Banking & Finance
23 January, 2018
What has happened?
South Korean regulators are investigating six unnamed commercial banks that are offering trading accounts to cryptocurrency exchanges in the country.
What does this mean?
According to a statement, the Korea Financial Intelligence Unit and the Financial Supervisory Service are looking at whether the banks are complying with anti-money laundering obligations and customers' identification measures.
"The inspectors will look into whether the banks comply with their anti-money laundering obligations in their transactions with cryptocurrency exchanges; and whether they have in place appropriate measures to verify their customers' identification in regard with cryptocurrency trading.," the statement reads.
The statement lists some of elements the regulators will investigate, including whether the banks have internal controls in place with regard to money laundering risks by cryptocurrency exchanges, whether they have electronic systems to match deposit holders' names with virtual account holders and whether they can stop transactions if the exchanges refuse to provide customers' information.
The statement also notes that the South Korean government is monitoring developments in the cryptocurrency field and will not hesitate to take action when necessary.
"The government continues to review all possible options including shutdown of cytptocurrency exchanges in order to minimize side effects of cryptocurrency trading – fraud using cryptocurrencies, cyber hacks on cryptocurrency exchanges, and irrationally overheated speculation."