AML Failures Can Lead To Penalties For Crypto Exchanges Based In Korea

South Korea’s best financial regulator, the FSC (South Korea Financial Services Commission), has recently decided that it will implement a number of penalties to various crypto exchanges should they fail to meet the proper criteria and implementation of anti-money laundering schemes and regulations. These new standards and penalties will be made official on April 20th next month, and it also coincides with the country’s revision of the ‘Using and Reporting Specific Financial Transaction Information’ act, which is scheduled to be put into effect as the month progresses.

Crypto exchanges to be subject to fine if they violate any of the three duties

As of the time of this writing, the crypto exchanges based in Korea will be subject to fines and penalties should they be found to be in violation of three primary duties. The first is internal control, which relates to any and all failures pertaining to not reporting illegal or suspicious trading activity and transactions.

The second is data maintenance, which refers to the inability to maintain the data regarding any fraudulent activities which may have been caught during the internal control period. Finally, the last one is any and all duties relating to VASPs (these include general failures such as the inability to not properly manage data and transaction records).

Penalties could go from 30% up to 60%

Many crypto exchanges in Korea will have to tread carefully from now on as the penalties will be officially administered next month and go from a minimum of 30% to, at the time of this writing, a maximum of almost 60%. These penalties will also be directly proportionate to the approved maximum amount, which itself will be subject to the relevant laws.

Furthermore, the FSC has also decided to administer an additional penalty reduction program which will be 50% for bigger firms and over 50% for smaller firms.

With South Korea being one of the most popular markets for cryptocurrency right now, it is easy to understand why local firms such as Bithumb have recently secured their AML measures. It will be interesting to see where all this goes, as South Korea also plans to introduce a new 20% tax next year, which will affect those who are earning more than $2,200 via crypto trading as well.

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