Coinone, one of South Korea’s major cryptocurrency exchanges, is creating a new center to strengthen its anti-money laundering capabilities.
- Coinone announced yesterday it has established an anti-money laundering (AML) center and is making Suspicious Transaction Reports (STRs) to financial authorities. Coinone’s AML Center, along with its partner NH Nonghyup Bank, will conduct know-your-customer (KYC) verifications, investigate incidents and disputes, and establish a cooperative system with outside parties. Coinone has also completed basic training for AML center employees on anti-money laundering efforts and reporting suspicious transactions, and plans to expand the center through additional recruitment.
- The Suspicious Transaction Report (STR) system is a legal and institutional device for detecting and preventing the laundering of illegal funds. Financial companies such as banks and securities firms are obligated to monitor transactions suspected of money laundering and report them to the Financial Intelligence Unit (FIU). Coinone, after submitting a regulatory compliance report to the FIU last month, is now classified as a financial company and must comply with relevant obligations.
- Last year, South Korea included the Financial Action Task Force’s (FATF) anti-money laundering and terrorism funding guideline, also known as the travel rule, into its regulations for financial transactions. Korea’s practice of the travel rule requires virtual asset exchanges to collect information on senders and receivers of crypto transactions over the amount of a million Korean won, which is about US$837. Korean authorities have given virtual asset exchanges until March 25 to comply with the travel rule requirements.
- In response, South Korean crypto exchanges Coinone, Bithumb and Korbit have launched a joint venture named CODE (Connect Digital Exchanges) to develop a solution for exchanges to combat money laundering and terrorist financing in line with FATF’s global standard.
- The Korea Customs Service also announced yesterday that it will strengthen measures on collecting the transaction information of virtual assets and increase efforts to inspect crypto-related transactions such as illegal foreign currency exchange or money laundering.