South Korea continues to tighten the control of the cryptocurrency market

South Korea continues to tighten the control of the cryptocurrency market

The government of South Korea, represented by Jung giJoong, the head of the department of economic management of the Office of Policy Coordination of the Government, informed that by the end of January 2018, all traders of cryptocurrencies should transform their anonymous accounts into registered ones in accordance with AML/KYC requirements. Moreover, a ban on the creation of so-called "cellular accounts" is also introduced. The latter were used by legal entities in order to simultaneously manage a large number of accounts.

In the event that the above requirements are not met, the violators will face imposing monetary penalties up to $ 47,000 or real imprisonment of up to 5 years.

Historical reference. It should be noted that back in 1993, absolutely all financial transactions in the country were inextricably linked with specific participants (i.e. any anonymous transactions were not allowed).

Now active work is continuingin South Korea on a draft legislative act, which would also introduce changes to the current taxation system. The purpose of such an act is to impose all kinds of taxes on absolutely all transactions with cryptocurrencies. And, in turn, the presence of registered accounts is a prerequisite for the successful implementation of such a project. Moreover, the effectiveness of its work will directly depend on how citizens will comply with AML/KYC requirements when carrying out operations with cryptocurrencies and cryptocurrency investments.

It is important to pay attention to the fact that there have already begun various kinds of inspections of the activities of banks that make payments based on blockchain technology. The accounts of all participants of such transactions and how they (the participants) fulfill the new regulatory requirements are checked.

ShinhanBank is the first and so far the only bank that has refused the personal verification of blockchain accounts. However, on January 13, 2018, after an organized meeting with representatives of the authorities, all traders accepted the requirements and are already carrying out relevant work to meet them.