The South Korea regulator cracks down on crypto money laundering by introducing a new rule against crypto companies that are not taking all the needed measures to prevent these malicious activities so let’s read more in our latest cryptocurrency news.
The rules are not in effect yet but the South Korea regulator says that they are already affecting the crypto market. The leading financial regulatory introduced penalties for crypto exchanges that don’t implement anti-money laundering laws and the FSC announced that starting April 20, all crypto exchanges and other crypto-related companies which facilitate crypto transactions will face fines of $26,000 to $52,000 which is more than 40% of the legal penalties.
The companies will have to pay fines if they don’t report suspicious transactions and will have to keep data on all of the transactions while maintaining a log of customer transactions and the smaller companies will have to pay smaller fines as well. The introduction of the regulation will be able to explain why Bithumb which is one of South Korea’s largest crypto exchanges restricted crypto accounts in countries that haven’t yet implemented anti-money laundering measures.
The Financial Action Task Force identified 21 such countries like South Korea’s neighbor as one Bithumb official noted:
“The company will continue improving its system to protect investors, and enhancing transparency in the crypto market.”
South Korea will not be the first country to crack down on anti-money laundering as the FATF introduced a recommendation like the member countries to implement stringent AML policies but while not legally binding, FATF will blacklist other members that ignore these recommendations. These include the so-called Travel Rule which requires crypto companies to share personal information with other companies when someone sends more than $3000 and crypto companies will have to think of a way how to perform this before FATF makes the countries get their act together.
The FATF also said that South Korea has a decent legal framework to prevent these types of activities but that the country has to do more to “stop government and public officials from laundering the proceeds of corruption.
As recently reported, With cryptocurrencies picking up steam and bringing in features of regular asset classes, South Korea’s government levies taxes on capital gains from digital currency. The country is the latest in the row to adopt this initiative as its Ministry of Economy and Finance said it will levy taxes on crypto starting from 2022. The government is going ahead with the proposed tax on crypto returns after a few reconsiderations.
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