South Korea’s financial regulator the Financial Services Commission’s Financial Intelligence Unit (FIU) has finally confirmed that the domestic circulation of all private cryptocurrencies would be banned in the country. The regulator argued that private coins' anonymity carries a high risk of money laundering. The Financial Intelligence Unit (FIU) deals with the regulatory concerns of anti-money laundering laws (AML) in South Korea.
The Financial Services Commission’s Financial Intelligence Unit (FIU) has confirmed delisting privacy-centric cryptocurrencies from its domestic cryptocurrency exchanges. The ban on private cryptocurrencies will come into effect from March 2021.
The regulatory body has specifically pledged on banning private cryptocurrencies such as Monero (XMR) and Zcash (ZEC).
The regulation on the private crypto ban was initially reported by local media in November 2020, however, it was only recently that the FIU confirmed the regulation. The financial watchdog will also oversee matters of the crypto industry from a legal perspective.
Previously, OKEx South Korea delisted private cryptocurrencies such as Zcash (ZEC), Monero (XMR), DASH (DASH), Horizen (ZEN), and Super Bitcoin (SBTC) in September 2019, citing the guidelines from Financial Action Task Force (FATF). However, the crypto exchange later suspended the delisting process of Zcash and Dash.
Following the confirmation on the private crypto ban, no South Korean crypto exchanges currently have any private cryptocurrencies listed on their platform.
The regulatory unit has further mandated cryptocurrency exchanges to flag and reports any unusual transactions on their platforms within three working days. As per the guidelines from FIU, the crypto reporting should specify the transaction’s values in fiat Korean won (KRW).
The regulatory body has also mandated the domestic cryptocurrency exchanges to collect information related to banking data to social security numbers from their customers. The FIU has even made the banks responsible for making the crypto exchanges compliant with AML rules.