Financial regulators in South Korea and Japan are carrying out more inspections and sanctions on crypto-currency exchanges.
In Seoul, the government’s primary financial regulator has announced anti-money-laundering inspections at the three major domestic banks that provide services to crypto-currency exchanges.
The Financial Services Commission said on Monday it would be conducting inspections at NongHyup Bank, Kookmin Bank and Hana Bank between April 19 and April 25 to check that they are complying with South Korea’s strengthened anti-money-laundering and know-your-customer (KYC) rules.
The Korea Financial Intelligence Unit, a watchdog with the mandate to prevent money laundering and illegal financial flows, is also involved.
NongHyup Bank provides services to Coinone and Bithumb, two of South Korea’s largest cryptocurrency exchanges, according to crypto site CCN.
The Financial Services Commission and the Financial Intelligence Unit also conducted joint inspections of six Korean banks in January. They said at that time they would collect information and provide guidance with regard to providing regulatory compliance.
South Korean regulators, in line with their newly updated KYC rules, outlawed anonymous crypto-currency trading in January and also banned non-Koreans from trading in cryptos. The Korean government is also expected to announce a crypto-currency taxation framework later this year.
In Japan, its financial regulator has suspended two crypto-currency exchanges for eight weeks for failing KYC rules. The Financial Services Agency banned the Eternal Link and FSHO exchanges until June after inspections revealed a lack of procedures around reporting suspicious transactions. The Eternal Link was also sanctioned for violating Japanese laws about using customer deposits for company expenses.
Japan’s Financial Services Agency has been ramping up supervision of crypto-currency exchanges after the world’s biggest crypto heist saw $500 million-worth of digital tokens stolen from the Tokyo-based Coincheck exchange in January 2018.
Japan and South Korea are the world’s second- and third-biggest biggest crypto-trading markets respectively, according to the BBC, after the United States.