Banks Deduct Points for Many Coins in Cryptocurrency Exchange Evaluations... Also Consider Users' Occupations

(Data provided by Yonhap News)

[Asia Economy Reporter Kwangho Lee] It has been revealed that commercial banks are likely to assign lower scores during the real-name account issuance review process for cryptocurrency exchanges if the exchanges handle a large number of coins and conduct many transactions with low-credit coins.

According to the office of Yoon Doo-hyun, a member of the National Assembly's Political Affairs Committee from the People Power Party, the Korea Federation of Banks prepared the "Virtual Asset Business Operator Risk Assessment Methodology" guideline last April, which requires cryptocurrency operators to prepare a money laundering risk assessment report through evaluations of inherent risk, control risk, and essential requirement checks.

However, the evaluation indicators and scoring for inherent and control risks, the evaluation grades and ranges based on the results, and the checklist for essential requirement compliance during financial transactions with banks are to be set autonomously by each bank.

In particular, the checklist for assessing the inherent risk of cryptocurrency operators quantitatively evaluates indicators related to "product and service risk," such as cryptocurrency credit ratings, the number of cryptocurrencies handled, volume of high-risk coin transactions, transaction volume per coin on the exchange, and services provided beyond cryptocurrency brokerage.

Specifically, the risk is considered higher when operators handle more low-credit virtual assets, have a larger number of tradable virtual assets, conduct more transactions with low-credit coins, and have higher transaction volumes of coins traded on the exchange.

Additionally, the inherent risk assessment checklist views the risk as increasing when the exchange provides more services using cryptocurrencies beyond simple trading. If the exchange operates small remittance or deposit services, the risk score is rated as "High," and if it handles margin trading (loan transactions), the risk score is rated as "Medium."

Furthermore, the inherent risk assessment checklist requires quantitative evaluation of indicators such as cryptocurrency transaction volume by country, number of customers by country, number of customers by industry, and number of high-risk non-resident customers. In other words, the risk is considered higher when there are more cryptocurrency transactions by high-risk nationality customers, more high-risk nationality customers, and more high-risk industry customers.

The country risk rating is divided into four levels, and individual occupations are classified into 38 categories, including high-risk occupations, and divided into four levels for evaluation. Corporate industry classifications are also divided into 46 categories, including high-risk occupations, and scored across four levels.

For individual customers, the highest risk scores are assigned to loan sharks and those engaged in gambling and entertainment-related services, while the lowest risk scores are given to general office workers, general public officials, judges, prosecutors, police officers, medical professionals such as doctors and pharmacists, and financial and insurance experts.

Moreover, the guidelines require qualitative evaluations of the exchange’s reputation, business structure, and records of financial transaction incidents. They also assess company soundness by examining whether executives and major shareholders have been involved in negative incidents such as fraud or embezzlement.

Representative Yoon stated, "The Korea Federation of Banks should disclose the contents of the guidelines and ensure that users can understand the criteria by which the existence of cryptocurrency exchanges is determined."

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