Cryptocurrency Exchanges to Enforce Customer Verification and Suspicious Transaction Reporting Obligations Starting from the 25th

On the 14th, as Bitcoin surpassed 70 million won to reach a new all-time high, the prices of Bitcoin and other cryptocurrencies were displayed on the market board at Bithumb Gangnam Customer Center in Gangnam-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Park Jihwan] From the 25th of this month, virtual asset service providers such as Upbit and Bithumb will be subject to anti-money laundering obligations. Users should check the reporting status of virtual asset service providers and be cautious if these providers collect resident registration numbers before their reports are approved.

The Financial Services Commission announced on the 16th that the amendment to the "Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information" was approved at the Cabinet meeting.

Going forward, those who wish to operate virtual asset businesses must report in advance to the Financial Intelligence Unit (FIU). Existing businesses must complete their report submissions within six months from the amendment’s effective date, the 25th. If existing businesses fail to submit reports by September 24th this year or continue operations without report approval, they will be considered unregistered operators and face imprisonment of up to five years or fines up to 50 million KRW.

The anti-money laundering obligations imposed on virtual asset service providers include customer identification and suspicious transaction reporting. However, considering the difficulty of fulfilling customer identification and suspicious transaction reporting obligations before report approval, existing virtual asset service providers may comply with anti-money laundering obligations starting from the date their reports are approved.

The financial authorities plan to implement inspections and supervision related to information provision obligations during virtual asset transfers starting March 25th next year. This is because time is needed to establish an information-sharing system among virtual asset service providers.

Users should verify the reporting status of virtual asset service providers when conducting virtual asset transactions. Some existing providers may close their businesses without reporting, so customers should confirm the reporting status and business continuity of existing providers as much as possible to avoid damages when trading virtual assets.

If a virtual asset service provider uses or provides personal information such as resident registration numbers collected for purposes other than intended, they will be subject to imprisonment of up to five years or fines up to 50 million KRW under the Personal Information Protection Act.

This content was produced with the assistance of AI translation services.