Banks in South Korea Instructed to Treat Crypto Exchanges as High-Risk Clients

South Korea’s banks have been instructed to treat crypto exchanges as high-risk clients by the country’s financial regulator.

• The Financial Services Commission (FSC) said crypto exchanges must be subject to strengthened transaction monitoring and ID verification, the Korea Times reported Sunday.
• Banks will be required to deny services to clients that do not comply with ID verification requirements or fail to report suspicious activity to the FSC's anti-money laundering unit, the Korea Financial Intelligence Unit.
• Exchanges will have to terminate transactions made by accounts that are not real-named based or have not been verified using the necessary identity checks.
• Of 60 exchanges in the country, only four are using real-name accounts that meet this standard, according to the Korea Times.
• This latest statement of intent by the FSC around stricter regulation of the crypto industry comes as exchanges have until Sept. 24 of this year to register as virtual-asset service providers (VASPs) for the regulator to then assess the legality of their operations.