According to a statement published by the South Korean Financial Services Commission (FSC), the entity’s Korea Financial Intelligence Unit held a meeting with virtual asset service providers (VASPs) in order to strengthen regulatory compliance. The top five South Korean cryptocurrency exchanges including Upbit, Bithumb, Coinone, Korbit, and Gopax have created compliance systems to monitor illegal activity.
South Korean VASPs Urged to Bolster Regulatory Compliance Standards
In an aggressive stand against proliferating unlawful activities in the digital currency market, South Korean authorities announced their commitment to bolstering the compliance efforts of virtual asset service providers, while adequate legislation is debated. The FSC’s Korea Financial Intelligence Unit, a government agency with the express mandate of combating financial crimes, convened a meeting to discuss strengthening compliance with virtual asset service providers (VASPs).
The head of the intelligence unit, Lee Yoon-soo, highlighted a burgeoning necessity. He asserted that “the need to establish market order and protect investors has increased significantly as the virtual asset market has been formed and developed domestically and internationally over the past few years.” The director added:
As the role of virtual asset operators is very important as the primary gateway for preventing illegal activities, we plan to support the enhancement of autonomous compliance capabilities of operators by strengthening the legal compliance incentive system and improving predictability for laws and systems.
The meeting revealed that Upbit has created an abnormal transaction detection system using artificial intelligence (AI). Bithumb developed a feature to automatically terminate the exchange app when a remote control app is installed and it detects money laundering transactions. Coinone enhanced management and monitoring of ‘risk wallet address’ related to financial accidents. Korbit introduced a real-time management system for each stage of Suspicious Transaction Reporting (STR) and a secondary review system.
Lastly, Gopax established a hotline that can immediately respond when an account freeze request related to crimes such as voice phishing is received. By engaging in a collective commitment, the attendees of the meeting pledged to fortify their shared dialogue around growing compliance abilities. They plan to sustain this commitment by convening consistently every 2-3 months going forward.
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