Cryptocurrency exchanges in South Korea that do not take comprehensive measures to collect data and verify identity may face heavy fines soon.
According to an official announcement released on Wednesday, South Korea’s Financial Services Commission submitted a revised proposal to regulate virtual asset providers, or VASPs.
The proposal introduces new VASP penalty standards as well as simplifies and integrates the industry’s existing penalty rules. As part of the revised proposal, the FSC would be able to correct VASP if they did not report or record suspicious transactions.
Fines vary depending on the severity and nature of the violations, from 30% to 60% of the statutory maximum amount. Criminal law 50% or more is available for some small businesses.
As part of the proposal, FSC also wants to require crypto service providers to have a rapporteur dedicated to large transactions, as well as provide written operating instructions and employee training.
According to the announcement, the proposal will be open for public comment from March 11 to April 20 and will go into effect “upon the announcement.” This proposal is linked to the Law on Reporting and Using Certain Information on Financial Transactions, which will be presented on March 25th. As a cryptocurrency exchange, VASP is required by law to require comprehensive knowledge of your customers and anti-money laundering procedures, including disclosure of clients’ real names.