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Four of the largest cryptocurrency exchanges in South Korea have established a hotline to report any unusual trading transactions, such as voice phishing and pyramid schemes. The anti-money laundering (AML) initiative is designed to address a major challenge in – and constant criticism of – the crypto ecosystem.
According to the announcement, Bithumb, Corbit, Coinone, and Upbit will work together to be able to deal with this issue. A common database in the real time, flagging suspicious wallet addresses.
Reports Yonhap
"They are now able to constantly check out any other transactions and take necessary measures, such as blocking their own related accounts."
"The cooperative step against money laundering via cryptocurrencies is expected to boost the soundness of the industry and to better protect consumers."
The four exchanges plan to expand the network by inviting additional crypto exchanges to pool information.
In the effort to curb criminal crypto activity, 14 South Korean exchanges established the Korea Blockchain Association last year. The exchanges, including Upbit, Bithumb and OKCoin, created a set of rules to address abnormal transactions.
According to the Korea Times,
Crypto exchanges (1) manage customers (2) cope with abnormal transactions quickly, (3) float new crypto with enhanced client protection system, (4) hold a minimum equity of 2 billion won, and (5) publish regular audit and finance reports.
The badociation would also be able to rely on loopholes that could be used for insider trading, price rigging and money laundering. "
At that time, however, an official said that there are a number of "issues left unsettled." The newly formed hotline is expected to add to another critical layer of checks and balances, and provides feedback and transparent reporting.
Industry leaders are aware that the industry is about manipulation, pump-and-dump schemes, exit scams, wash trading and enough shenanigans to scare off mainstream participants. As such, the South Korean initiative is part of a much larger effort among major crypto trading platforms to work together.
In August, the Winklevoss twins, founders of crypto exchange Gemini, launched the Virtual Commodity Association Working Group with Bitstamp participants, bitFlyer and Bittrex to improve transparency, accountability and security on digital badet trading platforms, and to advance the adoption of cryptocurrencies worldwide.
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