The Korea Financial Intelligence Unit, as well as other local financial agencies, will begin regulating cryptocurrency exchanges similar to how they currently regulate banks.
The intent is to impose strict anti-money laundering policies to ensure that criminals will not use cryptocurrencies to finance illicit operations; the move will notably help to legitimize the cryptocurrency industry within the country.
On June 8th, Kim Geun-ik, KFIU director, has proposed the country adopt stricter policies for banks and independent financial service providers. With all the hacks being reported in 2018, the cryptomarkets have been called upon to ‘get it together’. The KFIU will coordinate with the countries Congress to pass a bill to give them the authority to monitor traditional bank accounts and cryptocurrency users extensively in the hopes of creating transparency.
This ‘call for regulation’ is a double-edged sword; on the one hand, strict regulations could impede innovation and deter first-time crypto users. Stricter regulation on the other hand could bring a smidgen of customer protection and some much needed legitimacy to the markets.
Initially, the KFIU originally wanted to base its policies off of American counterparts that focus on preventing money laundering and terrorism financing with verification improvements. In addition, the situation is expected to be similar Japanese regulation of cryptocurrency.