Intense Anti-Money Laundering Pressure! South Korea's Financial Services Commission (FSC) Requires Enhanced Monitoring of Exchanges, Banks Seek Partial Liability Exemption

According to a report from The Korea Times, the Financial Services Commission (FSC) of South Korea has instructed banks to ensure that users of cryptocurrency exchanges are classified as high-risk and to enhance financial transaction monitoring and user identity verification. Due to significant anti-money laundering pressures facing banks, businesses are also seeking exemptions.

Registration Required by End of September, Expected to Affect Over 60 Exchanges

According to South Korean regulatory requirements, banks may refuse services to exchanges if they refuse to cooperate with identity verification procedures or fail to report suspicious activities to the Korea Financial Intelligence Unit (KoFIU).

As many exchanges in South Korea have not implemented identity verification and real-name systems, out of over 60 exchanges, only four have adopted them. Regulatory authorities are pushing for all operators to submit registration applications by September 24 to protect consumers from fraud and the risk of exchange closures. After applying, a three-month trading activity monitoring will be conducted, with KoFIU hoping to put an end to trading activities using borrowed or fake accounts.

Banks Face Anti-Money Laundering Pressure, Seek Liability Exemption

South Korean regulatory agencies require banks to monitor their customers' suspicious activities and report large suspicious transactions when they occur. In addition, if users of an exchange are harmed, the exchange may be held responsible for financial crimes as it is verified by a trusted bank.

Reportedly, South Korean banks have begun seeking to establish rules and limited liability for managing cryptocurrency activities, which may provide exemptions in cases of unintentional financial crime.

An industry insider stated, "Banks are being forced to take on this responsibility, so there is some rationale for having some disclaimers for this risky and costly task."

Regulatory Measures May Suppress South Korean Altcoin Activities

It is said that 90% of trading activities in South Korea are supported by altcoins and competitor coins. Criticized for the lack of accountability and high volatility risks, the public is hopeful that implementing regulations may change this situation.