Korean Banking Authority: Stop Complaining About Crypto Market Risk

A leading South Korean regulator has repeatedly urged banks to stop complaining about the risks associated with cryptocurrency exchanges and to accept that any partnership they enter into with trading platforms comes with risk.

Korean Banking Authority: Stop Complaining About Crypto Market Risks

As previously reported, banks in South Korea are increasingly claiming that they believe that only four trading platforms – almost certainly the “Big Four” of Upbit, Bithumb, Korbit and Coinone, will have to meet the government’s September 24th deadline Register all crypto exchanges with the Financial Services Commission (FSC), apply anti-trust protocols, money laundering (AML), accredited data security management and find banking partners who offer real-name authentication, such as a ramp-on / off wallet, if you want to continue working.

Banks have urged regulators to relax their stance after the FSC said banks would take 100% of the risk associated with taking over a stock market client. This means that if there is an AML violation at a partner exchange, the bank will be held liable, and the same can apply to a hack or a case of fraud.

Banks are demanding that exchanges admit mistakes or find other solutions – and claim that their overseas business could be jeopardized if AML violations are found in exchange partner transactions. Such concerns have led more and more major banks to abandon the concept of partnership with trading platforms. So far, Woori, KEB Hana, Kookmin and BNK Busan have stated that they are not considering crypto-related businesses – only Shinhan, NongHyup and K-Bank have commented on this.

The upcoming Toss Bank was also very cautious about crypto banking partnerships.

And the chairman of the FSC, Eun Sang-soo, urged the banks to stop talking about the matter. After Eun claimed earlier this month that “it would be good for the banks not to bring up this issue”, Eun doubled the mood yesterday.

KBS quoted Eun as saying:

“If money laundering on stock exchanges is suspected, banks are obliged to report the matter to the Financial Intelligence Unit in accordance with the regulations. Banks have all accepted this, so why are they still only talking about cryptocurrencies? “

Eun added that banks shouldn’t complain that they are being held accountable to the exchanges, suggesting that risk management is “the job of the banking sector”.

After the ruling Democratic Party announced earlier this week it was considering a measure that could delay a 20% tax on profits from crypto trading, a second proposal for a tax deferral until 2023 will be presented to the National Assembly.

Another MP – this time a member of the ruling party – introduced the law for private members to defer the collection of the tax, which means that traders can work tax-free until after the next general election.

The MP in question, Noh Woong-rae, stated that the move would “relieve” crypto investors and “support more stable growth in the crypto market”.

Another bill by an opposition Congressman has been tabled with the Democratic Party’s new crypto task force, which claims they are discussing support for the proposal.

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