South Korea took another giant step forward in regulating cryptocurrencies as seven major exchanges have joined forces to enhance the cryptocurrency ecosystem in the country. According to local media, representatives of the seven major exchanges met at a parliamentary policy debate on cryptocurrencies that was held this past Monday. The representatives signed an ‘Agreement for the creation of a sound cryptocurrency ecosystem’.
The agreement included joint measures such as information sharing, real-time monitoring of abnormal transactions in a bid to prevent cyber crime as well as protect investors. The seven cryptocurrency exchanges that agreed to the new measures are as follows.
- Coinplug (Cpdax)
The exchanges are also to establish a consultation system that will prevent money laundering, enhance KYC procedures and introduce some restrictions for transactions belonging to unverified users.
One industry official is quoted as calling it a close cooperation system:
With this agreement, exchanges can establish a close cooperation system and improve their image for investors, but in fact, there is no special penalty for failing to comply.
Lee Seok-Woo, president of Dunamu Inc., which handles all operations relating to the Upbit exchange, had stated a while back, that AML/KYC (anti-money laundering / know-your-customer) procedures were mandatory for every exchange that wished to operate in the country.
If you [crypto exchange] cannot meet the standard after a six-month or one-year grace period, you should close it.
South Korea On Track To Regulate Cryptocurrencies and ICOs
Back in June this year, regulatory officials from South Korea had stated that crypto exchanges would soon be regulated in the same way they regulate banks. The regulation shall be carried out by the Korea Financial Intelligence Unit (KFIU) in collaboration with other local financial regulators. With respect to ICOs, the country had promised to issue regulatory direction as soon as legislation was ready.
Kwon Dae-young, Head of the Financial Innovation Bureau at the Financial Services Commission (FSC), further explained the steps the country is taking towards regulating the ICO and cryptocurrency industry.
We are trying to institutionalize cryptocurrency exchanges, but before we do, we have to answer the question of how to deal with the damage and tears of many virtual currency investors.
We must see if any of the projects that can help the people in their daily lives have been presented. Trust and authenticity are important.
What are your thoughts on the seven cryptocurrency exchanges joining forces to better enhance the cryptocurrency trading ecosystem in South Korea? Please let us know in the comment section below.
[Image courtesy of Bitcoinist.com]