BEFORE YOU GO...
Check how Shufti Pro can verify your customers within secondsRequest Demo
Upbit is reportedly the first South Korean crypto exchange to register the Korean Financial Intelligence Unit (KoFIU) for AML.
KoFIU’s new Anti-Money Laundering (AML) rule came into effect on March 25, 2021 and stated that all cryptocurrency exchanges register with the unit before September 24, 202. As per the new rule, all crypto companies are liable to comply with the AML requirements, Customer Due Diligence, suspicious transaction reporting, and real-name accounts.
Upbit, the largest crypto exchange of the country, has registered with the KoFIU following this rule. This step has come into effect following the authority’s claim of blocking websites of crypto exchanges that fail to meet the September deadline. Apart from the crypto sector, foreign exchanges are also asked to register with the KoFIU if they operate in South Korea.
Upbit has partnered with K-bank for the purpose and will be implementing real-name verification of its customers, reports claim. Three other key crypto exchanges of the country have formed similar partnerships with banks to meet AML requirements. The Vice Chairman of the Financial Services Commission (FSC), Doh Gyu-sang, said on August 20 that one or two more crypto companies are likely to register before the end of this month.
Any local crypto platform that fails to comply with the new rule will face an outright ban on operating in South Korea. Exchanges have to establish partnership with banks and report real-name bank accounts for all their customers in order to register with the FIU. This has proved to be a challenge for crypto exchanges because banks avoid taking responsibility for any misconduct.
As of today, there are 61 crypto trading platforms operating in South Korea and according to FSC, none of the VASPs that were consulted in July are ready to meet the AML requirements.
Suggested Read: South Korea to Penalize the Non-Compliant Crypto Companies