Over the years, the crypto industry has witnessed increasing crimes using crypto assets. This is because transactions with virtual assets require no interference from third parties, making it easy for criminals to succeed.
However, more attention is coming from regulators to the crypto space. They aim to control the spread of criminal activities such as money laundering and terrorist financing using cryptocurrencies.
These objectives have propelled most watchdogs to set up regulatory frameworks to track and ensure compliance with anti-money laundering (AML).
Regulator Targets Customers With Large Crypto Holdings
The South Korean regulator has recently tightened its stance to maintain AML compliance in digital assets. As a result, the country’s financial regulator, the Financial Service Commission (FSC), is now focusing on crypto whales.
Its attention is on investors with assets worth more than 100 million won ($70,000) to curb the use of digital assets in money laundering. The FSC observed that the risk of money laundering increases with greater possession of digital assets and stablecoins.
The report from a local media mentioned that the watchdog is operating under new anti-money laundering guidelines. This involves closely watching digital asset whales with extraordinary holdings of stablecoins and other virtual assets.
According to the report, the use of stablecoins in money laundering is increasing. This is more pronounced with those stablecoins used mainly by the public. Moreover, the report stated that an independently listed digital asset might fail the listing criteria of other asset operators.
Check Tags On Users Making Huge Deposits
The South Korean watchdog has planned more processes to enforce its compliance rules on the digital sector. Besides its watch on whales and their digital activities, the regulator targets flow of massive deposits.
The FSC plans to maintain check tags on digital coin users who make significant deposits. It stated that a close watch would be on customers that perform huge crypto transactions. It will keep a quarterly check that will help to highlight any remarkable change in users’ holdings within the period.
South Korea has distinguished itself through its strict position on digital-related policies. The collapse of the Terra-LUNA ecosystem triggered the country’s high interest in crypto operations control.
As Terra crashed, many investors lost their investment capital and plans for returns on investments. The effect on the participants and the digital asset market, in general, was devastating, pushing the regulators to take action.
Recall that the FSC chair reported that the regulator wants to quicken its review of 13 bills on virtual assets in August. These were pending with the National Assembly of the country.
Also, the country’s financial regulators have increased their efforts to protect investors’ funds. Also, they are working toward flagging crypto legislation by the beginning of 2024.
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