South Korea Tightens Customer Identification Rules for Non-Profit Corporations and Virtual Asset Exchanges

On May 20, South Korea's Financial Services Commission (FSC) decided to tighten customer identification for non-profit corporations and virtual asset exchanges.

On May 20, South Korea’s Financial Services Commission (FSC) decided to tighten customer identification for non-profit corporations and virtual asset exchanges. The move is part of greater efforts to lessen the chances of digital asset investors engaging in money laundering.

This will see both banks and virtual exchanges pay closer attention to who their users are and monitor each transaction more closely. The new guidelines were concluded at the 4th Asset Committee meeting earlier this month.

The rules will see the reason for the move at virtual asset exchanges, and the money being deposited and withdrawn, verified.

Those transactions will also be monitored more closely by real-name account banks, which will track buying and selling activity of virtual assets. These rules are part of a broader plan by South Korea to control participation in the virtual asset market.

What is known is that these new regulations will see both the Korea Federation of Banks and the Digital Asset Exchange Association (DAXA) create rules that reflect them. The updated guidelines will be sent to both virtual asset exchanges and real-name account issuing banks by the end of May. Due to this joint effort, new policies can be seamlessly introduced into the market.

This decision by the FSC comes as virtual assets become more integrated into the financial landscape. South Korea has been actively monitoring and managing digital currencies to maximize their benefits for the nation while ensuring the stability of its finances.

As part of its broader strategy, the government is planning to assign real-name accounts to companies and professional investors in the industry by year-end. This will be the next phase as tech firms join the industry. The commission is also planning to introduce more rules for anti-money laundering in the near future.