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The main South Korean cryptocurrency exchanges, even competing ones, have launched a joint initiative to strengthen their efforts in the fight against money laundering.
According to a joint press release, Bithumb, Upbit, Corbit and Coinone have announced the establishment of a joint anti-money laundering initiative. The plan includes a direct phone line between the four entities that share real-time information on suspected / proven trading activities. They include cases related to unregistered security offers, abusive loans and voice phishing.
The exchanges will also establish a shared database containing suspicious encrypted wallet addresses. This would help companies detect the distribution of larger quantities of multiple trading platforms to a single portfolio. A shared database, according to the companies, will prevent such activities.
An excerpt from the press release reads as follows:
"The joint initiative against money laundering should produce significant results, as the four stock exchanges currently use effective user protection and fraud detection",
"In addition, the exchanges have experience in operating bank-authenticated virtual accounts, which has established strong relationships with traditional financial institutions," the stock exchanges added.
Cryptographic exchanges under banking legislation
This decision follows two years of hate business in South Korea with cryptocurrencies. In 2017, the Financial Service Commission (FSC) has been behind many financial misconducts in the ongoing cryptography boom. In response, the securities regulator has proposed to ban initial offers of coins. He stated that crypto-currencies were neither means of exchange nor financial products. However, the National Assembly has not transposed the proposal into a law.
At the same time, the South Korean crypto-computer industry has seen an increase in cases related to Ponzi schemes in digital currency, market manipulation, forced trading, arbitrage arbitrage and hacking of major stock exchanges. .
Misconduct has prompted lawmakers and law enforcement officials to take administrative action. This led to arrests, including the head of the crypto-exchange Coinnes, which diverted tens of millions of dollars from traders' accounts. In January 2018, FSC Vice President Kim Yongbeom announced the ban on anonymous transactions on local cryptographic exchanges. It has also banned foreigners and miners from exchanging cryptocurrencies.
The crypto trade in South Korea is among the most active volume markets in the world. | Source: Shutterstock.
In April 2018, 14 South Korean cryptographic exchanges, including Bithumb, OKCoin and Upbit, published a set of self-regulatory guidelines. One of the main strengths of these guidelines was the willingness of participants to monitor and report suspicious transactions.
In June 2018, the new Korean Financial Intelligence Unit (FIU) announced that it would oversee cryptographic exchanges under the Bank Act.
"We plan to include virtual currency exchanges in [the] direct supervision of the system against money laundering and the financing of terrorism, "said the FIU. "If a virtual currency exchange does not respect these obligations, the FIU or the FSS [Financial Supervisory Service] will be able to inspect the virtual currency exchange monitoring system. "
Crypto bills pending in the National Assembly
Despite the efforts of regulators and crypto-currency exchanges, the South Korean crypto-computer industry is still waiting for clear directives from the National Assembly.
The FSC confirmed that it submitted a cryptographic invoice in July 2018 prior to the meeting. She proposed to amend the law on electronic financial transactions with new definitions for cryptocurrencies and related activities. However, the proposal is still pending before the badembly, alongside five separate bills.
The South Korean parliament plans to enforce the bills in 2019.
CCN has reached BitHumb and Upbit for comments. We will update the article with their statements.
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