South Korean Regulator Extends AML Rules Adoption until the End of the Year

Tuesday, 15/06/2021 | 19:57 GMT by Felipe Erazo
  • The financial watchdog originally set a deadline until early July to implement the new anti-money laundering rulings.
South Korean Regulator Extends AML Rules Adoption until the End of the Year
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South Korea’s Financial Services Commission (FSC) has decided to extend the deadline for implementing the Anti-Money Laundering (AML) ) protocols in cryptocurrency exchanges until the end of 2021. Originally, crypto trading platforms were given until early July to establish these new AML rulings after the legislation was enacted on March 25, 2021.

However, the regulator granted a six-month grace period, instead of the original deadline, giving the crypto firms time to arrange banking deals to comply with the new set of rules. According to Yonhap, the FSC decided to extend the period until December 31, 2021, as not many exchanges are ready to be audited by banks and the South Korean regulators.

In fact, just twenty exchanges received the information security management system (ISMS) certification last week, and ten are expected to obtain it soon. The FSC argued that it seeks to prevent customers from suffering any collateral damages due to closures of crypto companies that do not meet the requirements on time.

“Since virtual currency transactions are mainly conducted through financial companies, we have extended the guidelines to prevent Money Laundering issues effectively,” the FSC added, meaning to the recent rulings included in the guidelines, asking banks to classify crypto exchanges’ customers as 'high risk' ones.

Three Months to Review Compliance Checking

Furthermore, the South Korean financial regulator expects to complete the reporting process by the end of the year because it takes around three months to check if exchanges complied with the guidelines accordingly. “We will strengthen monitoring of collection accounts of virtual asset operators that do not use real-name verification deposit and withdrawal accounts,” an officer from the FSC commented.

In terms of crypto taxes, the government has determined to move forward with a 20 percent crypto tax on capital gains from such transactions starting next year, despite recent political turmoil, as the presidential elections will occur in 2022.

South Korea’s Financial Services Commission (FSC) has decided to extend the deadline for implementing the Anti-Money Laundering (AML) ) protocols in cryptocurrency exchanges until the end of 2021. Originally, crypto trading platforms were given until early July to establish these new AML rulings after the legislation was enacted on March 25, 2021.

However, the regulator granted a six-month grace period, instead of the original deadline, giving the crypto firms time to arrange banking deals to comply with the new set of rules. According to Yonhap, the FSC decided to extend the period until December 31, 2021, as not many exchanges are ready to be audited by banks and the South Korean regulators.

In fact, just twenty exchanges received the information security management system (ISMS) certification last week, and ten are expected to obtain it soon. The FSC argued that it seeks to prevent customers from suffering any collateral damages due to closures of crypto companies that do not meet the requirements on time.

“Since virtual currency transactions are mainly conducted through financial companies, we have extended the guidelines to prevent Money Laundering issues effectively,” the FSC added, meaning to the recent rulings included in the guidelines, asking banks to classify crypto exchanges’ customers as 'high risk' ones.

Three Months to Review Compliance Checking

Furthermore, the South Korean financial regulator expects to complete the reporting process by the end of the year because it takes around three months to check if exchanges complied with the guidelines accordingly. “We will strengthen monitoring of collection accounts of virtual asset operators that do not use real-name verification deposit and withdrawal accounts,” an officer from the FSC commented.

In terms of crypto taxes, the government has determined to move forward with a 20 percent crypto tax on capital gains from such transactions starting next year, despite recent political turmoil, as the presidential elections will occur in 2022.

About the Author: Felipe Erazo
Felipe Erazo
  • 1036 Articles
  • 42 Followers
About the Author: Felipe Erazo
Felipe earned a degree in journalism at the University of Chile with the highest honour in the overall ranking, and he also holds a Bachelor of Arts in Social Communication. In addition, he has been working as a freelance writer and Forex/crypto analyst, with experience gained from several forex broker firms and crypto-related media outlets around the world. He has been involved in the world of online forex trading since 2010 and in the crypto sphere since 2015.
  • 1036 Articles
  • 42 Followers

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