Korea’s 4 largest cryptocurrency exchanges must implement FATF travel rules

Four major South Korean crypto exchanges have signed a Memorandum of Understanding (MOU) that enables them to jointly implement the Travel Rule of the Financial Action Task Force (FATF).

South Korea’s 4 largest crypto exchanges are required to implement FATF travel rules

The exchange group, which includes market leaders Upbit and Bithumb, as well as Korbit and Coinbit, must of course all exceed the September 24 deadline in order to receive regulatory approval from the commission of immediate testing of the trading platforms in the coming weeks.

The Travel Rule essentially means that cryptocurrency trading platforms must share transaction identifiers with each other and with financial institutions and institutions that are obliged and able to ensure the accuracy of the data they share with one another. Data such as national security or identifiers must be shared with the real names of customers and recipients to remove anonymity and reduce the risk of money laundering.

According to KBS, the 4 exchanges will look for solutions that comply with their travel rules before the end of the year.

“This is just another example of the greatness of the Big Four,” said a senior official on a competing trading platform. The official requested anonymity and anonymity of their exchanges, adding:

“They are trying to show that they are doing everything they can to impress the FSC.”

In the meantime, the supervisory authorities are also busy and have sworn to “crack down” on “fake accounts” on crypto exchanges. Some (mostly smaller) Korean exchanges allow customers to use so-called “Hive” or “Honeycomb” accounts, which are used to hide or disguise the identity of the users. Seoul has vowed to do away with this and has decided that as of September 24th, all crypto traders must use verified wallets linked to commercial bank accounts in the country.

According to EDaily and Asia Kyungjae, the FSC has educated financial institutions about the dangers of such accounts and the steps they can take to get rid of them. The regulator has also developed a “risk management system for crypto business operators” that allows them to “constantly investigate counterfeit accounts” and requires companies in the industry to “take countermeasures” if they identify those accounts.

Financial firms have the right to suspend transactions they believe are related to “fake accounts”.

And South Korean banks will also be reviewing exchanges’ coin listing guidelines as part of their risk assessment tests, Yonhap reported. Banks have been required to conduct risk management reviews on crypto exchange partners before agreeing to six-month real-name banking transactions.

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