South Korea Calls for Citizen Reports on Unregistered Crypto Exchanges Amid Increased Regulatory Measures
Summary:
South Korean financial authorities and the Digital Asset Exchange Association (DAXA) are jointly calling for reports from citizens on any unregistered crypto exchanges operating locally. This move is part of a larger effort to regulate and monitor domestic and foreign virtual asset companies that are non-compliant with local laws. DAXA and the Financial Intelligence Unit will assess the reports. The announcement coincides with South Korea's increased regulatory efforts in the cryptocurrency sector, which also includes laws requiring political candidates to disclose personal crypto holdings and plans to test a central bank digital currency (CBDC) in 2024.
An announcement was disseminated by South Korean financial authorities on December 4th, soliciting reports of any unregistered cryptocurrency exchanges providing services to their local populace. This initiative is a combined effort between the Digital Asset Exchange Association (DAXA) and the Financial Intelligence Unit (FIU) of South Korea. Five major digital asset platforms operating domestically - Upbit, Bithumb, Coinone, Korbit, and Gopax - are incorporated under DAXA.
The aim of soliciting these reports, as articulated by the regulators, is to identify local and overseas virtual asset businesses targeting South Korean citizens, which do not comply with the regulations stipulated in Article 7 of the Specific Financial Information Act. Information from these reports will initially be evaluated by DAXA before being forwarded to the FIU, which will then decide about the status of the operator and the need for further notification. DAXA officials have stated that the FIU is planning to take action, including informing investigative agencies, if operators persist in conducting "unregistered business activities."
Further, the announcement clarified that reports can be submitted through DAXA's designated tip email address and must contain all relevant business details, reasons for suspicion and proof of its unregistered operations.
South Korea's intensification of its engagement in the cryptocurrency sector aligns with the latest development. The ruling Democratic Party of South Korea stipulated on November 14th that its political candidates must reveal their personal cryptocurrency assets for reasons of "transparency".
In October, South Korea's Financial Supervisory Service (FSS) declared it was laying the groundwork for supplementary regulations to the Virtual Asset Users Protection Act, passed earlier in 2023. As per the FSS, these new rules are expected to be implemented by January 2024.
On November 23rd, South Korea's central bank revealed plans to recruit 100,000 citizens to experiment with its impending central bank digital currency (CBDC) in 2024. In other news, a controversial $18.9M scandal erupted involving a Hong Kong exchange, HTX issued an apologetic 'airdrop': Asia Express.
Published At
12/4/2023 8:38:47 AM
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