The Korea Blockchain Association (KBA) proclaimed their new self-regulatory framework for members on Tuesday of this week. These new rules are expected to help strengthen the integrity and transparency of cryptocurrency exchanges in the country. The announcement was done in a press conference held at the Korea Federation of Small and Medium Business (SME) in Seoul.
In the press conference, the chief executive of KBA Jeon Ha-jin said:
“The new measures being undertaken are to prevent criminal activities like money laundering and bring order in virtual currency exchanges in the country.”
KBA rules requirements
According to Ha-jin, all exchanges are expected to comply with the Anti-Money Laundering guidelines set by the government and the following regulations:
- All exchanges are to do an identity verification procedure before allowing any person to create an account. They are also to keep a 5-year record of user transactions.
- Any exchange in the country that trades in tokens issued by initial coin offerings (ICOs) is required to form a special internal committee to check on the listing of the tokens. They are also required to have clear and detailed information of the tokens to help customers have a better understanding of the ICO.
- Exchanges in the association are required to have a minimum equity capital of 2 billion Korean won ($1.8 million). They are also to publish regular audit reports, shareholders listings, and conduct regular self-evaluations.
- They should also have a system that is able to detect fraudulent activities on their platform. Once such activity has been detected, the exchange is required to take the appropriate action and inform authorities.
- The exchanges should have an ethics charter to prevent employees from disclosing information of the exchange. This is also to prevent employees from making illegal transactions and evading taxation.
The Korean blockchain association will examine 14 virtual currency exchanges on May 1st to check whether they are complying with these new rules. The exchanges are also expected to do a self-evaluation before May 4, 2018.
The association was formed in earlier this year to help improve services offered by the exchanges in Korea. It has 66 members since its formation.