South Korean Exchanges Free To Work With Banks, State Officials Declare
South Korean regulators have approved for major exchanges to operate with banks after a meeting laid down security regulations.
Exchanges Approved For Having Strong Security Measures
South Korean Banks dealing with cryptocurrency exchanges have received a major boost after an announcement by the country’s financial regulator. According to FSC commissioner, Choi Jong-Ku, at the moment we don't have any non-compliance challenges and security on facilities offering virtual accounts for crypto trading platforms in the country.
The revelations came after the Korean government finalized an audit on the progress on all state agencies and commissions. According to Choi, all cryptocurrency related businesses will be allowed to take part in the banking system provided that they meet all the laid out regulations. He emphasized policies around KYC and anti-money laundering regulations.
He acknowledged that no bank had violated the already existing laws and they were free to open accounts with the exchanges operating in the country. Under the country’s regulations, exchanges are allowed to adopt a system known as virtual bank accounts that permits clients to deposit and withdraw funds in the local currency quicker. The capability enables the user to hold KRW on exchanges in a secure manner.
At the beginning of this year, the Korean government called on banks to stop working with exchanges as a way of curbing the likelihood of money laundering through cryptocurrencies.
Facilities like Nonghyup have dealt with the country's crypto exchanges for over a year now. Despite the call by authorities, the bank continued offering its services to crypto exchanges. The bank received a lot of pressure to terminate its association with the Bithumb trading platform among other prominent exchanges. In the statement by Choi, exchanges were assured that in the future, they will not be denied a chance to collaborate with banks.
The development has received positive feedback from key players among them the South Korean Blockchain Association. The body represents a wide range of exchanges based on their market capitalization. The group stated that it was optimistic about the future following the announcement.
A number of leading exchanges have recently been approved as having met all of the regulations under the FSC. Bithumb and Upbit are among the exchanges that have been given the go-ahead to operate for their observation of security guidelines and their efficient management systems.
Two months ago, analysts drawn from KISA concluded that the country’s top exchanges like Bithumb and Coinnest had some of the strongest security measures in place.