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South Korean financial regulatory authorities have asked the cryptocurrency exchanges to file the authorities’ reporting act to operate legally in the country and control money laundering. Failing to file the business in the act of law will lead to the shutdown of the business for the cryptocurrency exchanges.
- September 24 is the last date to file the business
- Any exchange that fails to do so will have to bear the punishment of jail term for five years or a fine of up to 50 million won.
The cryptocurrency exchanges operating in South Korea might have to be shut down if they do not follow the regulations laid down by the country’s watchdog. As per the Act on reporting and Using Specified Financial Transaction Information, every cryptocurrency exchange has to complete the reporting procedure to operate in the country.
September 24 deadline
Since the last month, the act became effective so that certain cryptocurrency exchanges can prevent money laundering. The exchanges are asked to complete all the formalities related to the act to the financial authorities. Any exchange that fails to do so by September 24, 2021, will be shut down and will not be legalized to work in the country.
There has been a massive surge in money laundering cases in South Korea, resulting in a system breakdown. The authorities have passed the act for the exchanges to operate legally only after signing the reporting procedures.
According to the act, a virtual operator himself has to report the authorities after fulfilling the requirements. The operator has to mention the bank’s real name, deposit and withdrawal account, and the Information Security Management System Certification (ISMS).
200 operators running
After the formalities laid out in the act are completed by the operator, the bank checks whether the operator can prevent money laundering. Currently, almost 200 operators are running their business in South Korea. It is mandatory for all of the operators to meet the authorities’ requirements, which is considered unlikely.
If the operators do not register their business by September 24 and continue to operate without registration, they are liable for imprisonment of up to five years or a fine of up to 50 million won. And if any exchange shuts down the business, it will have to return the deposits and virtual currencies to users.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
