As the South Korean government stepped up its supervision of anti-money laundering (AML), the country’s major cryptographic exchanges voluntarily complied with it, and it was reported that the bank failed to meet the compliance guidelines. Therefore, South Korea has also been discussing how to promote password-related anti-money laundering measures in the United States.
The government is concerned about the bank's anti-money laundering compliance
South Korea’s anti-money laundering directive currently does not apply to direct crypto currency exchange. The government has enabled banks to monitor and report on any password-related money laundering activities.
In order to comply with the country’s anti-money laundering directives, most major Korean banks have been increasing their compliance officers.
For example, NH Nonghyup Bank “has recently established an independent agency to deal with issues related to compliance,” and the “Korea Times” reported on Friday that the bank has increased the number of employees in the division from 16 to 23. Despite this, the Central Daily reported on Saturday:
Despite its efforts, the Financial Supervisory Service (FSS) of South Korea’s financial watchdog also warned that the bank did not fully improve its internal control system.
Cooperation with the United States
South Korea has also been working with the United States to promote anti-money laundering measures related to cryptocurrencies. The "Korea Times" describes:
In addition to international cooperation measures, U.S. Treasury Secretary Siegel Mandelk also discussed with FSC Vice President Kim Young-Men on how to promote anti-money laundering measures specifically related to password assets.
The United States has found that the Bank of Korea’s anti-money laundering measures are inadequate. The Financial Services Agency (FSC), the highest financial regulator in South Korea, said on Friday that the New York Financial Services Department (NYDFS) “has notified financial regulators that the investigation of South Korean banks suspected of being suspected of operating in New York has failed to meet compliance guidelines.”
“The central regulator has fined the Agricultural Bank of 11 million U.S. dollars.” Because of poor control and the anti-money laundering compliance system, the “Central Daily” stated that the NYDFS “will start investigating the six South Korean banks operating in New York City. They are the agricultural cooperative banks. , Woori Bank, KB National Bank, Shinhan Bank and the two state-owned banks, Korea Industrial Bank and Korean Development Bank, which elaborated: As the penalty of New York DFS will damage the overall reputation of the Korean financial industry, local finance Regulators are also working hard to encourage banks to strengthen their control and compliance systems.
The list includes banks providing real-name services for encrypted exchanges: Nonghyup Bank, Shinhan Bank and Korea Industrial Bank. They are responsible for ensuring that the encrypted accounts they serve are AML compliant.
Encryption Exchange Voluntary Compliance
The Financial Intelligence Unit (FIU) is responsible for the prevention of money laundering and illegal financial flows, including the financing of terrorism. The FIU worked with the FSS to ensure that the bank complied with anti-money laundering rules and both agencies reported to the FSC.
Cryptographic transactions are currently not directly regulated by the FIU or the FSS, but regulators have proposed to include them in the jurisdiction of both agencies.
At the same time, the country’s largest password exchange is voluntarily upgrading its anti-money laundering and internal control systems. Bithumb prevented 11 countries from using its platform and reduced the withdrawal limit for accounts that do not use real-name systems. Upbit, supported by Kakao, uses Thomson Reuters' system to achieve the same goal. The 23 encryption exchanges also agreed to abide by self-discipline standards set by the Korea Blockchain Industry Association.