Eun Sung-soo: "Overseas Virtual Asset Exchanges Targeting Domestic Customers Are Subject to Reporting"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] Even virtual asset exchanges with servers located overseas will likely be prohibited from operating domestically if they fail to meet the requirements of the Act on Reporting and Using Specified Financial Transaction Information (the Specified Financial Transaction Information Act, or Specified Financial Act) when conducting businesses such as KRW payment services targeting domestic customers. In other words, virtual currency exchanges based overseas that conduct business targeting domestic customers will also be subject to registration with the Financial Intelligence Unit (FIU).

On the 13th, at the full meeting of the Political Affairs Committee, Eun Sung-soo, Chairman of the Financial Services Commission, stated, "We will have the FIU Director send direct letters to overseas virtual asset exchanges to clearly clarify whether they are conducting business targeting domestic customers," and added, "If they operate targeting domestic customers, they must meet the requirements under the Specified Financial Transaction Information Act (Specified Financial Act) to be allowed to operate domestically."

Chairman Eun responded this way to a question from Lee Jung-moon, a member of the Democratic Party of Korea, who asked, "Are exchanges like Binance, which are based overseas, not subject to FIU registration?"

According to the Specified Financial Act, virtual currency exchanges must complete FIU registration by September 24, having fulfilled prerequisites such as obtaining Information Security Management System (ISMS) certification and real-name accounts.

Regarding the registration obligation, Chairman Eun said, "We plan to send letters to the FIU Director and overseas exchanges that provide Korean language services," and added, "We will send guidance requesting clarification on whether the Korean language service is merely a simple service or an attempt to conduct business."

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