South Korea to Impose Heavy Penalty on Cryptocurrency Violations

The Financial Services Commission of Korea (FSC) introduced new penalty standards for cryptocurrency service providers today. The financial regulator is planning to impose heavy penalties on digital exchanges in the country if they fail to report suspicious transactions.

According to the official announcement, FSC has asked local crypto exchanges to keep a separate record of the cryptocurrency transactions of the customers. The regulator instructed virtual assets service providers (VASPs) to verify the identity of their clients.

“Under the revised regulation, financial institutions and VASPs will be subject to penalties if they are found to be in violation of internal control duties (failure to report suspicious transaction activities), data maintenance duties (failure to keep relevant data on suspicious transactions), and duties specifically pertaining to VASPs (failure to keep separate management of customers’ transactions records). The revised regulation also introduces a new penalty abatement of fifty percent. For small-scale entities, penalty abatement can be granted in excess of the fifty percent limit,” FSC mentioned in the official announcement.

According to a recent report published by the Korea Herald, South Korean cryptocurrency exchange Bithumb is restricting crypto trading accounts held by users staying in regions that have not adopted anti-money laundering measures.

Cryptocurrency Tax Rule

Finance Magnates earlier reported about a delay in South Korea’s proposed crypto income tax rule. The National Assembly of South Korea asked for a delay in the crypto tax rule to push the implementation to January 2022. The country is planning to introduce a regulatory framework for cryptocurrency users in the country, but some investors are unhappy with the short time-frame given by the Government for the implementation of rules.

According to a report published by Newspim, Seoul Metropolitan Police Agency officially brought charges against the Chairman of local crypto exchange, Coinbit and two other unnamed executives for manipulating the cryptocurrency market through fake trading volumes on the digital exchange.

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