In a bid to enhance oversight in the virtual asset market, South Korea is gearing up to conduct virtual asset exchange inspections later this year, with the aim of ousting ineligible platforms.
Authorities are considering implementing an advanced suspension system for suspicious transactions to swiftly prevent the concealment of illicit funds at all stages of the investigation process.
According to reports from Yonhap News, the Financial Intelligence Unit (FIU) unveiled its “2024 Work Plan” on Monday after gathering input from experts through consultations with the Policy Advisory Committee.
The FIU intends to bar unauthorized virtual asset exchanges from accessing the Korean won market and strengthen screening and anti-money laundering measures to eliminate ineligible exchanges already in operation. To bolster these efforts, the FIU plans to engage the assistance of legal and accounting professionals.
Mid-Year Review and Policy Adjustments
The FIU will conduct an initial check in the first half of 2024 to assess money laundering risks and market operations. A more comprehensive review will follow in the second half, with any virtual asset operators failing to meet standards facing expulsion.
Furthermore, the unit aims to expand the review to include major shareholders and broaden the law’s scope to disqualify individuals with a history of violations. Additionally, social credit criteria, such as debt default, will be taken into consideration.
The FIU also proposes the implementation of a Financial Action Task Force (FATF) framework to swiftly identify crimes and halt suspicious transactions during pre-prosecution investigations.
South Korean Officials Mandated to Disclose Crypto Holdings
South Korea, boasting major exchanges like Upbit, BitHumb, CoinOne, Korbit, and Gopax, accounts for approximately 30% of global crypto trading, with around 4% of its population owning cryptocurrency.
Regulators have intensified scrutiny on crypto firms over suspected fraud, embezzlement, and trust breaches, with new regulations set to take effect on July 19.
Moreover, in response to the Coin Gate political scandal, where a crypto-related parliamentary committee lawmaker was accused of trading coins using insider information, a ministry announced that high-ranking public officials must disclose their cryptocurrency holdings starting this year.