South Korean banks will review the cryptocurrency guidelines regarding the privacy of crypto exchanges, the nationality of the customers and the criminal record of the employees and place them in the categories “preferred”. High priority “when doing a risk assessment to see if they are cooperating with trading platforms.
As previously reported, crypto exchanges have until September 24th to partner with a domestic commercial bank that can offer digitally verified fiat on / off services. Social security, authenticated by real name, or the exchange will be forced to close if it doesn’t.
But the government has told banks that they must take 100% of the risks associated with partnering with an exchange. In other words, if money laundering occurs on an exchange, the bank has to blame its partners.
After financial regulators essentially asked the banking sector to stop whining and accept its fate this week, banks responded by increasing the criteria by which they will judge their fate.
Per Yonhap and Biz Watch, a South Korean banking association, have presented a risk scale for banks that want to calculate the exact risk level of a potential counterparty switch. The scale includes the following elements:
– Certificate of data security
– How to efficiently manage deposits, tokens and transaction details for each customer
– Are tokens that promote data protection listed?
– History of embezzlement and / or fraud by officers and employees và
– history of hacking
– Nationality of the user
– credit ratings
– Number of tokens listed
Number of high risk customers
Banks have also asked to investigate how exchanges manage anti-money laundering (AML) risks on an internal basis, internal auditing policies, customer verification practices, and authentication protocols used to verify employee ID.
The banks have stated that only the four exchanges with currently “right” banking partners will likely survive September 24th unless the government relaxes its stance on crypto regulation.
It can be seen that exchanges in Korea are struggling with regulations from the supervisory authorities. You are constantly under pressure to check everything at the bank and make it transparent.
Meanwhile, the operators of V Global, a domestic cryptocurrency exchange that police suspect is a front for a Ponzi scheme worth around UD 1.75 billion, have suffered a blow. Police, who arrested four employees, including the company’s 31-year-old CEO and at least two other executives, referred all four cases to prosecutors.
Yonhap reports that prosecutors are likely to announce later this month whether they will be prosecuting the group for fraud – after customers complained about their shares being promised back.
According to police, the manager enjoyed a “luxury lifestyle” prior to his arrest.
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