Renewal Applications of Cryptocurrency Exchanges – Stricter in South KoreaAugust 1, 2019
South Korean Banks are tightening their approach towards cryptocurrency exchanges. The new measures are based on FATF guidelines. Major Cryptocurrency exchanges have reported issues concerning the renewal of their agreements with the banks, as the banks have proposed stricter norms in response to newer FATF guidelines.
In order to renew bank accounts, the cryptocurrency exchanges are expected to comply with strict anti-money laundering norms as proposed by the FATF (Financial Action Task Force).
There were no severe objections concerning the renewal of the accounts of cryptocurrency exchanges. However, per the new regulations, banks are held legally liable for the money laundering activities. Eventually, banks are placing heavy demands on the renewal applications of the cryptocurrency exchanges.
An anonymous official from Korea stated, “To meet this standard, small and medium-sized trading sites that lack operating costs are likely to disappear from the market.”
The South Korean regulator also required that the local cryptocurrency trading platforms compensate their customers for their losses even if the exchange was not directly responsible for their injuries. All of these were based on the final version of the guidelines which were provided on June 21 at the by the FATF. The G20 Countries also support the FATF’s regulatory guidelines. A fast and effective implementation of this regulatory norms has been required during the Osaka summit.
Robert A. Cohen, who has been the Chief of the United States SEC, has stepped down from his role at the Division of the Enforcement Cyber Unit.
Steven Peikin when talking about the role of Robert A. Cohen stated, “The Cyber Unit has been a great success under Rob’s strategic leadership […] Soon after its creation, the Cyber Unit immediately began filing impactful cases that protect investors and demonstrate the SEC’s ability to respond nimbly to new and difficult challenges.”
Regulatory barriers are cited as one of the significant reasons for why Abra, the cryptocurrency wallet platform will not deliver its services to US-based customers. Abra stated, “US users holding positions in these crypto assets will have to exchange or withdraw their investments from Abra by 11:59 PM EST on August 29, 2019. After that date, any remaining balances in those assets will be converted to Bitcoin in the app,” Abra added.
Several other exchanges are also coming up with new norms citing reasons related to regulatory uncertainties. Several investors are now watching the regulatory norms hoping for fair crypto regulation.