Plan,’ signaling a significant shift in the country’s approach to regulating virtual assets. With a focus on eliminating oversight and combatting money laundering, the plan outlines robust measures to regulate the crypto industry.
Enhanced Oversight and Compliance Measures
The FIU’s ‘2024 Work Plan’ as reported by Yonhan News includes stringent measures to strengthen oversight of virtual asset exchanges. Hugo Philion, CEO of Flare Network, emphasized the importance of these measures, stating, “The plan aims to expel ineligible exchanges and prevent them from entering the Korean won market.”
One of the key initiatives is introducing a preemptive transaction suspension system to address suspicious transactions swiftly. Philion highlighted the significance of this system, stating, “It aims to thwart attempts to conceal criminal proceeds by swiftly suspending suspicious transactions.”
FIU plans to expand reporting requirements and screening processes for virtual asset exchanges to enhance regulatory compliance further. These measures include reviewing renewal reports comprehensively and strengthening anti-money laundering inspections.
Aligning with International Guidelines
FIU intends to adopt Financial Action Task Force (FATF) guidelines to implement preemptive suspension systems for suspicious transactions, aligning with international best practices. Philion emphasized the importance of aligning with global standards, stating, “It underscores South Korea’s commitment to combatting financial crime and ensuring the integrity of the crypto market.”
In addition to regulatory measures, South Korea’s Financial Services Commission (FSC) has proposed new amendments to enhance regulatory oversight of the crypto sector. These amendments include requiring new executives at crypto companies to obtain regulatory approval before assuming duties, and granting the financial watchdog more authority over the local crypto sector.
The proposed regulations have generated mixed reactions from stakeholders. While some industry players welcome the increased oversight as a step towards legitimacy and investor protection, others express concerns about potential regulatory burdens stifling innovation.
The Republic of South Korea has taken a proactive stance towards strengthening its regulations on virtual assets. With improved regulations and proposed legislative amendments, authorities aim to curb market manipulation, illegal trading practices, and money laundering activities in the crypto market.