South Korea has introduced a groundbreaking ‘2024 Work Plan,’ signaling a major shift in its approach to regulating virtual assets. This comprehensive plan focuses on eradicating oversight and tackling money laundering, outlining robust measures to reshape the crypto industry.
How? Let’s discover below.
Strengthening Oversight: FIU’s Decisive Steps
The Financial Intelligence Unit (FIU), as reported by Yonhan News, is set to strengthen oversight of virtual asset exchanges, aiming to expel ineligible exchanges from entering the Korean won market. Hugo Philion, CEO of Flare Network, emphasizes the significance of these measures.
“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.”
The FIU plans to expand reporting requirements and screening processes for virtual asset exchanges, enhancing regulatory compliance. This includes a comprehensive review of renewal reports and intensified anti-money laundering inspections.
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Embracing FATF 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.”
Changes Proposed
Complementing these measures, South Korea’s Financial Services Commission (FSC) proposes amendments for regulatory oversight. This includes new executives at crypto companies obtaining regulatory approval and granting more authority to the financial watchdog.
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.
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Making Changes – One Step at a Time
South Korea’s proactive stance involves fortifying regulations on virtual assets. With enhanced regulations and proposed amendments, authorities aim to curb market manipulation, illegal trading practices, and money laundering in the crypto market, ushering in a new era of responsibility and accountability.
