Report suggests that Korean banks be exempted from liability for crypto-related crime
Banking institutions in South Korea have reportedly requested not to be held accountable for crimes related to cryptocurrencies such as money laundering. According to local media, financial regulators are now developing rules that could exempt Korean banks from overseeing the crypto exchanges they work with.
New guidelines to appease South Korean banks
Korean banks remain reluctant to open real name accounts for traders on domestic cryptocurrency exchanges, the Korea Herald wrote on Sunday. The reasons are hidden in recently passed regulations that oblige trading platforms to work with local financial institutions. Few of them have succeeded as banks fear they could be held liable for money laundering, fraud and other crimes related to cryptocurrency transactions.
The Financial Services Commission (FSC), South Korea’s main financial regulator, is now considering issuing specific guidelines that could take some of the burden off banks, the Korean daily said, citing an unnamed government official. The release stated that the guidelines are likely to be presented in the form of “no-action letters” in which government officials can state that they will not recommend legal action against banks if the above issues arise.
A final decision on the matter is expected by the end of next month, according to the official. The report suggests that regulators are aware of the concerns expressed by financial institutions. Banks now run the risk of being held responsible for failing to detect potential fraud or money laundering activities in the issuing of real name accounts. Providing relevant guidelines to ensure that Korean banks are protected from such risks can alleviate their worries and open them up to crypto service providers.
Banks and stock exchanges get stuck with problems with real name accounts
Changes to the Law on Reporting and Use of Specified Financial Transaction Information, which went into effect in March, require Korean crypto exchanges to partner with local commercial banks, which should issue real name accounts to their users by September 24th, as the Hana banking group decided to opt out of keep out of the industry.
Only the four largest trading platforms Upbit, Bithumb, Coinone and Korbit have so far been able to find a banking partner. The online K-Bank is currently opening real name accounts for Upbit, while Shinhan Bank is partnering with Korbit and NH Nonghyup Bank is providing the service for Bithumb and Coinone, according to the Korea Herald.
At the same time, hundreds of smaller exchanges are threatened with withdrawing funds to trade cryptocurrencies if they don’t partner with a Korean bank by the September deadline. All 200 platforms in South Korea can be shut down, the chairman of the FSC, Eun Sung-soo, warned in April.
Meanwhile, a number of Korean exchanges have begun removing some “high risk” coins and putting others on warning lists in preparation for the upcoming stricter rules on crypto-related transactions in the country. The delisting, which has increased market volatility, is also seen as a move to calm Korean banks.
Do you think crypto exchanges will be able to convince Korean banks to open real name accounts for their traders? Let us know in the comments section below.
Photo credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
source https://bidsfor.me/report-suggests-that-korean-banks-be-exempted-from-liability-for-crypto-related-crime/
Comments
Post a Comment