South Korea’s Financial Services Commission (FSC) has decided to extend the deadline for implementing the anti-money laundering (AML) protocols in cryptocurrency exchanges until the end of 2021. Originally, crypto trading platforms were given until early July to establish these new AML rulings after the legislation was enacted on March 25, 2021.
However, the regulator granted a six-month grace period, instead of the original deadline, giving the crypto firms time to arrange banking deals to comply with the new set of rules. According to Yonhap, the FSC decided to extend the period until December 31, 2021, as not many exchanges are ready to be audited by banks and the South Korean regulators.
In fact, just 20 exchanges received the information security management system (ISMS) certification last week, and ten are expected to obtain it soon. The FSC argued that it seeks to prevent customers from suffering any collateral damages due to closures of crypto companies that don’t meet the requirements on time.
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“Since virtual currency transactions are mainly conducted through financial companies, we have extended the guidelines to prevent money laundering issues effectively,” the FSC added, meaning to the recent rulings included in the guidelines, asking banks to classify crypto exchanges’ customers as “high risk” ones.
Three Months to Review Compliance Checking
Furthermore, the South Korean financial regulator expects to complete the reporting process by the end of the year because it takes around three months to check if exchanges complied with the guidelines accordingly. “We will strengthen monitoring of collection accounts of virtual asset operators that do not use real-name verification deposit and withdrawal accounts,” an officer from the FSC commented.
In terms of crypto taxes, the government has determined to move forward with a 20 percent crypto tax on capital gains from such transactions starting next year, despite recent political turmoil, as the presidential elections will occur in 2022.