More restrictive anti-money laundering (AML) compliance measures could be incoming for South Korean crypto exchanges after a lawmaker lodged a private member’s bill in the National Assembly.
The National Assembly, South Korea’s parliament, will likely debate and vote on the bill, proposed by MP Hong Seong-guk of the ruling Democratic Party.
Hong has proposed making amendments to existing financial legislation, requiring companies registered as virtual asset service providers (VASPs) to abide by the same kind of AML compliance protocols as are currently applied to conventional financial service providers.
The proposal would see the top financial regulator, the Financial Services Commission, require VASPs to submit data on transactions and monitor them for suspected AML violations – flagging and reporting suspicious-looking crypto operations.
Hong claimed that hacking and money-laundering is rife in the domestic crypto sector, where he claimed “over USD 167m in transactions” had taken place over the past five years, per the Daejon Ilbo.
Hong also said that there were “loopholes” and “blind spots” in both existing and new legislation that will become effective in March next year – which also contains AML compliance-related provisions for crypto exchanges.
The new bill does not yet have the support of any major political party, but could well build momentum over August as it is indicative of the mood in the National Assembly. Many MPs have moved to criticize the crypto sector of late, insisting that it has been allowed to grow unchecked and tax-free.
A separate private member’s bill unveiled last month by another Democratic Party MP pertaining to crypto tax preempted the government’s own – very similar bill – by a matter of days.