Korean Government started Investigation on Major Banks for Crypto Regulations
January 8, 2018 7:30 am
The South Korean government will start investigating the major banks for their agreement with cryptocurrency regulations on Monday. This progress follows the regulator’s recent announcement banning the use of virtual bank accounts for anonymous trading.
Investigating 6 Major Banks
The South Korean Financial Intelligence Unit (FIU), below the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS) described on Sunday, January 7, that they will be investigating the six major banks for agreement of cryptocurrency regulation.
The investigation will be conducted from January 8 to January 11. The investigation will be taking place between Shinhan Bank, Industrial Bank of Korea (IBK), Woori Bank, Nonghyup Bank, Korea Development Bank (KDB), and KB Kookmin Bank.
Last month, government’s officials have announced that they will ban anonymous crypto trading.
“The FIU and FSS will check whether banks have properly implemented their anti-money laundering obligations to operate virtual accounts. The FIU has imposed more than 40 checklists on suspicious transactions, stipulating virtual currency as a ‘high risk’ transaction. “
The Korea Herald described it is rare for the two organizations to conduct a joint survey, a move that industry watchers viewed as beyond a watch on anti-money laundering measures by the banks and ultimately intended to cool the overheated market.
Last week, the FSS announced that the number of fiat deposits at crypto exchanges as of December 12 last year which had worth to 2.067 trillion won [~USD$1.95 billion]. Even though, 111 virtual bank accounts were identified at the six aforementioned banks at the end of the December.
To end-up with the anonymous trading, the government has banned banks and crypto exchanges from issuing new virtual accounts and adding new members to the existing ones.
The Real Name Identifying System is expected to be implemented around Jan 20
The government has been working on a system for implementing the real-name identity verification on cryptocurrency traders. This system is expected to be implemented around January 20, which can be used to end the anonymous crypto trading.
JoongAng Daily said:
“The real name confirmation service that banks are building by the end of this month is a method of allowing deposits and withdrawals only when the account of the trader who is identified and the account of [the trader at] the virtual currency exchange are the same.”