South Korea to Penalize the Non-Compliant Crypto Companies
Financial watchdogs in South Korea have announced regulations to prevent financial crimes in the crypto industries. The new regulations consist of penalties for crypto exchanges that fail to comply with the strict anti-money laundering requirements.
The Financial Services Commission (FSC) of South Korea has announced that from April 20th, the crypto exchange companies and other companies involved in transactions will face penalties between $26,000 to $52,000 if they are not taking measures to regulate.
The companies will even have to pay the fines if they neglect to report the authorities of any suspicious activities. They are also to keep the data regarding the transactions and keep a customer data log. The fines depend on the size of the company and will vary accordingly.
Many crypto exchanges in the country have restricted crypto accounts with unregulated countries. The Financial Action Task Force (FATF) has pointed out 21 other countries that are not taking anti-money laundering measures properly.
Anti-money laundering measures are not only taken seriously by South Korea. FATF has produced guidelines for the member countries to develop strict anti-money laundering policies. FATF’s recommendations are not legally binding but it can blacklist the country that fails to take the recommendations seriously. Being blacklisted by FATF can be harmful to the country’s economy.
The recommendations include the new travel-rule that requires crypto companies to report and share information with other crypto firms if someone sends more than $3000. Now crypto companies are rushing to comply with these rules before FATF issues a warning to the countries for getting their act together.
Last April, FATF said that: “South Korea has a sound legal framework to prevent money laundering, but that the country needs to do more to stop government and public officials from laundering the proceeds of corruption.”