The chief of South Korea’s main finance sector regulator has said that no banks will be exempted from anti-money laundering and counter-financing of terrorism compliance when they sign contracts with virtual asset trading platforms.

Fast facts

  • According to South Korea’s crypto exchange regulations, crypto trading platforms must acquire contracts with local banks to provide their users with real-name bank accounts for withdrawals and deposits of Korean won as part of an effort to prevent financial crimes such as money laundering, embezzlement and price manipulation. 
  • Following the issuance of the regulations, the Korea Federation of Banks filed a request to financial authorities to ensure that banks were not held responsible for any conduct involving money laundering or terrorism funding by cryptocurrency exchanges unless they had acted intentionally or been grossly negligent.
  • In making his comments about banks’ responsibilities, Financial Services Commission chief Eun Sung-soo said banks’ desire for immunity from AML/CTF responsibilities stemmed  from “a lack of knowledge about money laundering.” He said AML compliance was a worldwide requirement, and that it was absurd to think it possible that one country could grant an exemption to its banks. 
  • Eun also said that since 2018, all Financial Action Task Force member countries had been on guard against virtual assets being used for money laundering or terrorism funding. The FATF recently released the outcome of a global plenary session at which it urged all jurisdictions to implement its revised standards and subject virtual assets and virtual asset service providers to standard ALM and CTF measures.