With just months to go before new legislation comes into force requiring all of South Korea’s crypto exchanges to implement strict anti-money laundering (AML) policies, the race is now on to adopt solutions ahead of time – and avoid falling foul of the law.
So which AML solutions are South Korean crypto exchanges adopting ahead of next year’s legal changes? And how might they impact customers?
Blockchain business consultant and former banking sector employee Lee Jong-cheol told Cryptonews.com,
“The biggest crypto players seem very keen to roll out ‘convergence’-type solutions that will allow customers to clear initial AML and Know-Your-Customer (KYC) protocols quickly and at one fell swoop. Some even want to use blockchain-powered digital documentation or decentralized ID (DID) solutions or streamline using the same sort of processes banks use. They don’t want signing up for an account to become prohibitively complicated – they will fight to prevent that.”
And Lee stated that a smooth user experience was the priority for all bigger exchanges.
“AML solutions will likely be seamless. Customers won’t even notice that they exist, for the most part – unless they make the sort of trades that would raise red flags at a bank,” he said.
Per D Daily, some exchanges started preparing their AML solutions in February, before the new law was even voted in.
Upbit stated that it has been working with America’s Chainalysis and has been “building up” its AML system. Rival Bithumb, meanwhile, has paired up with a firm called OctaSolutions, which will provide customer verification solutions as part of a new suspicious transaction reporting (STR) system.
Both firms will also make use of solutions provided by GTOne, a governance tech firm that currently provides AML-related services to major commercial banks in the country.
The other two members of the traditional “big four” exchanges, Coinone and Korbit, have partnered with AML solution provider Able Consulting, a firm created by former AML experts at Samil-PwC, a PricewaterhouseCoopers joint-venture – in addition to in-house development efforts that make use of AI technology.
A New ‘Wave of Regulatory Obligations’ Over Crypto Players in EU
‘The Game Has Changed,’ Says Arthur Hayes As BitMEX to Verify All Its Traders