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South Korea FSC Identifies 14 ‘Fake’ Crypto Accounts Held by VASPs

  • Richard Marley
  • July 29, 2021
  • 2 minutes read
  • 56
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All crypto accounts in South Korea are directed to register under their real names. Third-party bank accounts have also been banned. 

South Korea’s financial regulator, the Financial Services Commission (FSC), has announced the results of its investigation into deposit accounts held by VASPs (Virtual Asset Service Providers).

The authority stated that 14 fake deposit accounts have been detected that are listed under fictitious or fraudulent credentials. 

After the examination of 94 deposit accounts belonging to 79 VASPs, information from 14 accounts did not match the real name of the owners. Additionally, third party bank accounts are not allowed. 

According to the South Korean banking and anti-fraud laws, all crypto companies are required to open bank accounts under their real names. However, the investigation revealed that 14 crypto accounts had carried out transactions under either another employee’s name or the name of another legal entity. 

Local news sources have revealed that the FSC has ordered banks to suspend all such fraudulent accounts. The 14 cases have been handed to Korea Financial Intelligence Unit, which will relay the cases related to crypto money laundering to the police and the prosecution service. 

Until the registration deadline of 24 September, authorities will continue to keep a close check on the deposit accounts held by VASPs as ordered under the Act on Reporting and Using Specified Financial Transaction Information, which took effect in March with a six-month transition period.

In the previous month, banks in South Korea were directed to file STRs to KoFIU in case large withdrawals from VASPs deposit accounts are detected. Additionally, the FSC has sent a notice to 27 foreign VASPs advising them to register if they wish to conduct business with Koreans. 

Suggested Read: South Korea Demands Crypto Exchange Data from Banks for Tighter Regulations