Bithumb, Coinone and Korbit Team Up for FATF Travel Rule Compliance
Bithumb, Coinone and Korbit have founded a joint venture to facilitate all efforts for maintaining compliance with FATF’s travel rule by March 2022.
Three out of four leading crypto exchanges in South Korea, Bithumb, Coinone and Korbit, have established a joint venture to develop solutions for complying with the Financial Action Task Force’s (FATF) crypto travel rule.
The company, named COnnect Digital Exchanges (CODE), has been set up using KRW 900 million in funding, with each exchange holding one-third of the shares and equal voting rights.
The FATF’s travel rule provides guidance for VASPs (Virtual Asset Service Providers) to effectively tackle money laundering and terrorist financing issues. It also requires all exchanges to collect Personally Identifiable Information on users and providers of crypto transactions. South Korea’s financial authorities have included the travel rule guideline in its new set of regulations last year, requiring data collection for all transactions of over KRW 1 million — around US$860.
CODE will be developing data monitoring and sharing systems that correspond with the travel rule. This will streamline AML compliance for South Korean exchanges and enable them to continue doing legal business with their clients after 24 September.
Crypto exchanges have to sign agreements with banks allowing them to issue real-name-based bank accounts for customers by 24 September, in order to become registered to operate in Korea.
Up till now, only the largest crypto exchange in Korea, Upbit, has obtained registration, leveraging a partnership with K-bank for real-name verification. Upbit was also planning to join the CODE partnership, however, it dropped out of the agreement saying the move could be seen as anti-competitive.
Numerous other crypto exchanges worldwide are opting for AI-powered KYC and AML screening solutions to meet global compliance standards, lower operational down costs, and financial crime threats in one go.
Suggested Read: Crypto Regulations 2021 – What Digital Currency Providers Need to do