The Financial Services Commission (FSC) in Korea has announced that Foreign Virtual Asset Services Providers (VASPs) like crypto exchanges must register by September 24th, 2021. The commission warned that exchanges that do not register before the set date will receive a hefty fine and be banned from operating.
South Korea made the new regulation in March and gave the exchanges a six-month timeframe to comply. The FSC chairman explained that crypto exchanges still interested in operating must get authorization from the FSC’s Anti-Money Laundering (AML) watchdog, also known as the Korea Financial Intelligence Unit (KoFIU).
The FSC cautions that:
“If they continue to operate without registration, they will be subject to up to five years of imprisonment or a maximum fine of 50 million won (US$43,455),”
In line with this, the KoFIU sent out reminders to 27 foreign crypto exchanges in the country.
This regulation may affect more than 100 small crypto exchanges in South Korea that have earlier used opaque accounts to get investors. As a result of this regulation, the crypto exchanges must now register users with their real names, which may cause many exchanges to close up.
In view of this, the smaller exchanges are considering taking legal action against the government as the regulation has caused local banks to be wary of crypto transactions.
Image Credits: Pixabay
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