As crypto regulators across the globe rush to impose recommendations brought forth by the Financial Action Task Force (FATF), for South Korea, its FIU plans to come out from the shadows. Now, the Financial Intelligence Unit (FIU) is indirectly regulating the crypto sector in South Korea by working with financial institutions.
Through FIU, under South Korea’s Financial Services Commission (FSC), banks, get the administrative guidance they need in working with crypto firms. However, now the FIU wants to come out and regulate the sector directly under its terms. In their bid to place the crypto sector under its palms, FIU intends to introduce a licensing system for cryptocurrency exchanges. Through the licensing system, transparency of transactions in the crypto space will improve by a considerable margin. However, the above depends on the amendment of an Act on Reporting and Use of Certain Financial Transaction Information.
While speaking during a public hearing, Lee Tae-hoon, head of administration and planning at the FIU, said;
“If the amendment of the Act on Reporting and Use of Certain Financial Transaction Information gets passed by lawmakers in the National Assembly, the latter will be a huge breakthrough. Apart from just helping prevent money laundering in the crypto sector, the enactment will help in raising the effectiveness of regulations. Through the law, FIU will get the powers to regulate the sector directly.”
While the FIU wants to move in and regulate the industry, crypto exchanges in operation want laws in place to be clarified first. At the center of their demand is for agencies concerned to straighten regulations on the issuance of real name accounts. Through the latter, crypto exchanges will be elevated to the same level as financial institutions in South Korea.
As a country, South Korea has played a considerable role in providing a conducive market for the crypto sector by going beyond just imposing the right laws. It is only recently that the national government declared Busen a regulation-free zone for the blockchain sector. Now blockchain firms have a dedicated area they can test run their innovative ideas before unveiling them to the world.