Korean Government Starts Inspecting Major Banks for Crypto Regulation Compliance

The South Korean authorities will start inspecting major banks for their compliance with cryptocurrency regulations on Monday. This move follows the regulators’ recent announcement prohibiting the use of virtual bank accounts for anonymous trading.

Also read: Russian Regulators Draft Law to Restrict Crypto Mining, Payments, and Token Sales

Inspecting 6 Major Banks

The South Korean Financial Intelligence Unit (FIU), under the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS) said on Sunday, January 7, that they will jointly inspect 6 major banks for compliance of cryptocurrency regulation.

The inspection will take place between January 8 and 11. Woori Bank, KB Kookmin Bank, Shinhan Bank, Nonghyup Bank, Korea Development Bank (KDB), and Industrial Bank of Korea (IBK) will be inspected.

This move follows the government’s clampdown on the use of virtual accounts for anonymous trading at the end of last month, as news.Bitcoin.com previously reported. Financial News described:

The FIU and FSS will check whether banks have properly implemented their anti-money laundering obligations to operate virtual accounts…The FIU has imposed more than 40 checklists on suspicious transactions, stipulating virtual currency as a ‘high risk’ transaction.

The Korea Herald commented, “It is rare for the two organizations to conduct a joint survey, a move that industry watchers viewed as beyond a watch on anti-money laundering measures by the banks and ultimately intended to cool the overheated market.”

Real-Name System Expected Around Jan 20

Last week, the FSS revealed that the amount of fiat deposits at crypto exchanges as of December 12 last year amounted to 2.067 trillion won [~USD$1.95 billion]. Furthermore, 111 virtual bank accounts were detected at the six aforementioned banks at the end of December, the news outlet detailed.

In an effort to end anonymous trading, the government has prohibited banks and crypto exchanges from both issuing new virtual accounts and adding new members to existing ones, as news.Bitcoin.com previously explained.

The government is developing a real-name identification system which is expected to be introduced around January 20. Joongang Daily elaborated:

The real name confirmation service that banks are building by the end of this month is a method of allowing deposits and withdrawals only when the account of the trader who is identified and the account of [the trader at] the virtual currency exchange are the same.

What do you think of the government inspecting major banks for crypto regulation compliance? Let us know in the comments section below.

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