Thursday, September 28, 2023

The South Korean Financial Services Commission (FSC) has publicly released a statement, noting that its Korea Financial Intelligence Unit had a meeting with virtual asset service providers (VASPs) to intensify regulatory adherence. In an effort to monitor and eliminate illicit activities, South Korea’s leading five crypto exchanges – Upbit, Bithumb, Coinone, Korbit, and Gopax – have all developed compliance infrastructures.

South Korean VASPs Encouraged to Heighten Regulatory Adherence Measures

As part of a proactive approach to tackle the growing instances of unlawful undertakings within the digital currency realm, South Korean regulators are reinforcing their commitment to enhancing the VASPs’ compliance practices, pending the formulation of appropriate legislation. The Korea Financial Intelligence Unit of the FSC, a governmental entity with the explicit mission to fight against financial crimes, assembled a meeting to accentuate the strengthening of compliance with VASPs.

Lee Yoon-soo, the leader of the intelligence unit, underscored an emerging requirement. He stated that “the urgency to institute market order and safeguard investors has significantly escalated as the virtual asset market has matured and expanded both domestically and globally over the past several years.” He further added:

Given the vital role of virtual asset providers in serving as the primary barrier against illegal transactions, we aim to boost the autonomous compliance prowess of these providers by reinforcing the legal compliance incentive structure and enhancing clarity for laws and systems.

The gathering disclosed that Upbit has deployed an AI-based system to detect unusual transactions. Bithumb has devised a function to automatically shut down the exchange app when a remote control app is found and money laundering transactions are detected. Coinone has amplified its control and surveillance of ‘risk wallet address’ associated with financial mishaps. Korbit has rolled out a real-time management system for every phase of Suspicious Transaction Reporting (STR) and a secondary review protocol.

Finally, Gopax has set up a hotline that can swiftly act upon receiving an account freeze request related to crimes like voice phishing. By taking part in a joint pledge, the meeting participants promised to strengthen their common discourse around burgeoning compliance skills. They intend to uphold this commitment by regularly gathering every 2-3 months in the future.

What are your views on the leading five South Korean crypto exchanges enhancing their regulatory compliance techniques? Please share your thoughts and perspectives on this topic in the comments section below.

Frequently Asked Questions (FAQs) about Regulatory Compliance in Crypto Exchanges

What measures are South Korean crypto exchanges taking to curb illicit activities?

South Korea’s leading five crypto exchanges – Upbit, Bithumb, Coinone, Korbit, and Gopax – are developing robust compliance systems to monitor and eliminate illegal activities. For example, Upbit has developed an AI-based system to detect unusual transactions, while Bithumb has implemented a function to automatically shut down the exchange app when potential money laundering transactions are detected.

Who organized the meeting with the virtual asset service providers (VASPs)?

The Korea Financial Intelligence Unit of the South Korean Financial Services Commission (FSC) convened the meeting. The aim was to discuss and intensify regulatory compliance within the industry.

What is the purpose of these compliance measures?

The purpose of these compliance measures is to strengthen market order, protect investors, and prevent illegal activities. These measures are seen as crucial given the rapid growth and development of the virtual asset market domestically and internationally.

How frequently are these compliance meetings planned to be held?

The meetings, aimed at enhancing and discussing compliance abilities, are planned to be held regularly every 2-3 months.

What specific measures are the exchanges implementing?

Each exchange is implementing different measures. For instance, Coinone has improved its management and monitoring of ‘risk wallet address’ related to financial incidents. Korbit has introduced a real-time management system for each stage of Suspicious Transaction Reporting (STR) and a secondary review system. Lastly, Gopax has established a hotline to respond immediately to account freeze requests associated with crimes like voice phishing.

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SatoshiN July 28, 2023 - 2:01 pm

upbit using AI for detecting unusual transactions, now that’s what I call future tech!

Hodl4Life July 28, 2023 - 3:13 pm

compliance is crucial, but too much regulation can stifle innovation. hope they strike a balance.

BlockchainFan101 July 28, 2023 - 7:15 pm

’bout time regulations got a boost…don’t want my investments getting tangled up with some shady stuff!

CryptoJunkie July 28, 2023 - 10:56 pm

Wow, these South Korean exchanges ain’t messing around. Good to see they’re tackling the dark side of crypto head on.

KryptoKim July 29, 2023 - 1:48 am

Great initiative but we gotta be careful, too much red tape could scare off new investors and startups, jus saying.

CyberSecurityGuru July 29, 2023 - 5:58 am

Remote control app detection by Bithumb, huh? Wonder how effective that’ll be. but hey any step toward safety is a step in the right direction.


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