South Korean crypto exchanges that fail to take extensive data collection and identity verification measures could soon face heavy fines.
According to an official announcement on Wednesday, the South Korean Financial Services Commission presented a revised proposal to regulate virtual asset service providers (VASPs).
The proposal introduces new VASP penal standards and simplifies and integrates existing penal rules for the industry. Under the revised proposal, the FSC can fine VASPs for failing to report and record suspicious transactions.
The fines vary between 30% and 60% of the maximum permitted by law, depending on the severity and nature of the violations. For some small businesses, penalty relief of 50% or more is available.
As part of the proposal, the FSC would also like to require that crypto service providers have a dedicated reporter for large transactions and provide written work guidelines and employee training.
According to the announcement, the proposal will be open to public feedback from March 11th to April 20th and will take effect “as soon as it is promulgated.” The proposal is related to the Law on the Reporting and Use of Specified Financial Transaction Information, which will be passed on March 25th. Under the law, VASPs like crypto exchanges are required to conduct extensive Know Your Customer and anti-money laundering audits including reporting the real names of their customers.