Korean banks implement stricter requirements for crypto exchanges after new FATF guidelines: Report
Tue, 30 Jul 2019, 04:52 am UTC
Recent reports indicate that South Korean banks are making the requirements for renewing account by four crypto exchanges more difficult. This is done with the justification of adhering to new anti-money laundering laws.
The crypto firms that are now having a hard time renewing their accounts via South Korean banks are Bithumb, Upbit, Coinone and Korbit, local media outlet The BChain reports. This was after new Financial Action Task Force (FATF) guidelines for anti-money laundering were released. As a result, financial institutions are now becoming stricter as far as requirements go.
In the past, these four crypto firms were able to renew their accounts every six months without an issue. Now, as banks, including IBK, NongHyup, and ShinHan Bank, have become legally liable if money laundering activities are identified, they are starting to place demanding requirements on exchanges, starting this month.
Restrictions have become so tight that it has been expressed that some smaller crypto exchanges might not be able to survive what the FATF and the corresponding financial institutions are asking of them. Having to suspend existing accounts and stopping the addition of new accounts will eat into their funds, which could ultimately lead them to shut down.
This is what an anonymous crypto exchange executive said, The Block reports. If so, South Korea might be getting closer to what India is currently doing with its own crypto industries.
“In order to meet this standard, small and medium-sized trading sites that lack operating costs are likely to disappear from the market,” the official said.
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