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S Korea Issues Guidelines To Curb Virtual Crypto Trading, Money Laundering

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The South Korean government has released two sets of guidelines for banks and Cryptocurrency Exchanges to eliminate anonymous trading of virtual currencies and reduce money laundering activities using them.

South Korea's Financial Services Commission (FSC) issued document detailing the government's Special Measures for the Elimination of Virtual Currency Speculation, and anti-money laundering (AML) guidelines.

Under the new guidelines, Banks in South Korea will require cryptocurrency exchanges to share users' transaction data with banks, thus eliminating anonymous cryptocurrency trading, and enforcing real-name identity verification on traders.

Banks in the country, where cryptocurrency is rising in popularity, currently offer virtual accounts to customers to do cryptocurrency transactions.

But from January 30, when banks introduce the real-name system, cryptocurrency account holders will have to reveal their identity to avail deposit and withdrawal services.

Existing virtual accounts will be converted to real-name ones, FSC Vice Chairman Kim Yong-bum said.

FSC has selected six commercial banks - Nonghyup Bank, Industrial Bank of Korea, KB Kookmin Bank, Shinhan Bank, Hana Bank, and Gwangju Bank - to introduce the new system.

As per anti-money laundering guidelines (AML) and Suspicious Transaction Reporting, banks will monitor the exchanges they service for unusual transactions.

If the transaction amount is more than KRW 10 million ($9355.41) per day, more than KRW 20 million ($18,710.82) for 7 days, or frequent transactions occur in a short time, it should be reported to the Korean Financial Intelligence Unit (FIU).

If the exchange has a high risk of money laundering or requires information, the bank may terminate the transaction.

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