South Korean government enhances verification rules for bitcoin exchanges

The South Korean government has announced today what they said are “measures to temper cryptocurrency speculation”. Following up on its October ban of ICOs and removing leverage from Korean cryptocurrency exchanges, the Financial Services Commision (FSC) of South Korea directed more measures toward exchanges.

The measures include enhancing KYC systems to verify the real name of the account holder. The government’s framework states the concern for improving current AML as well as ensuring Koreans pay their taxes. Korean exchanges are not to take on any foreign account holders as well.

Current banks which are providing services to exchanges are to no longer add new members either. The financial regulator wants to make sure that banks are not dealing with any unauthorized cryptocurrency providers.

The FSC said it is not ruling out, once improved verification systems are in place, that it would implement a per transaction limit as it looks for more established policies.

Back in July, the latest on concrete regulation proposals from Rep. Park Yong-jin of the ruling Democratic Party of Korea said that he would introduce updates to build a regulatory framework for digital currencies and exchanges.

One of the measures aimed to revise the Electronic Financial Transactions Act. If approved, it will require traders, brokers, or other business entities involved in cryptocurrency transactions to get regulatory approval from the Financial Services Commission as they do in Japan, as well as retention of reserve capital of at least 500 million won ($436,300) and data reporting facilities.