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Crypto-Exchanges in South Korea May Soon Face Fines for Lacking in Due Diligence

The cryptocurrency industry that we see today was not the same as when it was launched back in 2009. Back in 2009, the cryptocurrency industry was completely decentralized, unregulated, and without any worth. This is the reason why the cryptocurrency industry was not adopted by the mainstream institutions in the initial phases.

However, as years started passing and the crypto-industry grew, things started changing drastically in the cryptocurrency industry. As the country from around the world started observing the fast spread of the cryptocurrency industry, they started getting active.

As the platform was decentralized, it had the tendency of being used by criminals, terrorist syndicates, and corrupt lawyers to carry out money laundering and terrorist funding on large scale.

This is the reason why regulators from all over the world started implementing strict regulatory policies on firms that deal with cryptocurrencies. Now that the entire cryptocurrency industry has gained global recognition and mainstream success, things are becoming even stricter for the industry.

Countries that welcomed or are planning to welcome the crypto-blockchain technologies are ensuring that they have proper rules and regulations in place before they venture more into the industry.

One such country is South Korea that has welcomed the cryptocurrency industry since it came into being. The country has now made the crypto-blockchain industry a subject in its education system and is hoping to create more jobs in this field.

However, the government of South Korea is ensuring that it doesn’t come at the cost of risking or jeopardizing the very regulatory presence and hold of the country around cryptocurrencies.

South Korea is now one of a handful of countries that have imposed taxation on the revenues made through cryptocurrencies. The South Korean regulators had made the first announcement around the tax legislation back in 2020. At that time, the government had announced that taxation will be applied to cryptocurrencies starting April 2021.

However, to ensure that the taxes were properly implemented, the regulators would require data visibility from cryptocurrency exchanges. This is where the crypto-exchange operating in South Korea comes in and is expected to keep providing the government with the required information.

In the light of the above, the South Korean regulators have issued a notice in regards to data provision from crypto-exchanges. They have notified that if an exchange fails to provide the data, doesn’t go through identity verification, and extensive data collection measurements, it will be subjected to hefty fines.

The announcement has been made by the Financial Services Commission of South Korea on Wednesday, March 17, 2021. The announcement comes after the recent reports that the Financial Services Commission had made certain changes and additions to the taxation law for cryptocurrencies.

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