Korean crypto exchanges could soon face fines for gaps in due diligence measures

South Korean crypto exchanges that fail to take extensive data collection and identity verification measures could soon face heavy fines.

According to an official announcement on Wednesday, the South Korean Financial Services Commission presented a revised proposal to regulate virtual asset service providers (VASPs).

The proposal introduces new VASP penal standards and simplifies and integrates existing penal rules for the industry. Under the revised proposal, the FSC can fine VASPs for failing to report and record suspicious transactions.

The fines vary between 30% and 60% of the maximum permitted by law, depending on the severity and nature of the violations. For some small businesses, penalty relief of 50% or more is available.

As part of the proposal, the FSC would also like to require that crypto service providers have a dedicated reporter for large transactions and provide written work guidelines and employee training.

According to the announcement, the proposal will be open to public feedback from March 11th to April 20th and will take effect “as soon as it is promulgated.” The proposal is related to the Law on the Reporting and Use of Specified Financial Transaction Information, which will be passed on March 25th. Under the law, VASPs like crypto exchanges are required to impose extensive reviews of your client and anti-money laundering reports, including reporting, on their clients’ real names.

Recent articles

Crypto exchanges struggle as El Salvador adopts Bitcoin

Today, Bitcoin is becoming an official currency in El Salvador, and the markets and crypto exchanges seem to be struggling. On...

Schools are back – and time to comply with the ICO’s Age Appropriate Design Code

As of September 2, 2021, the United Kingdom's Information Commissioner's Office ("ICO") expects organizations to use their Age Appropriate Design Code ("AADC"). The...

the ICO wants input on when personal data goes international

You don't have to be a data-focused IT service provider to realize that the UK was lucky enough to receive an adequacy decision from...