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The Financial Services Commission in South Korea is investigating 16 cryptocurrency exchanges for violating the Specific Financial Information Act. The FSC has alleged that these exchanges had been working as non-reporting entities.

Furthermore, they performed they actively performed gross sales actions on their web sites by means of engaging presents with out reporting to the South Korean authorities. On August 18, the Financial Intelligence Unit (FIU), working below FSC, names these 16 exchanges for violating the regulation.

This included among the prime exchanges working within the nation reminiscent of KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex.

The Special Act Rules In South Korea

According to the Special Act, any enterprise entity related to digital property, want to satisfy the regulatory necessities of the FIU. This contains getting the data safety administration system (ISMS) certification.

In the case of non-reporting, a enterprise can face 5-year imprisonment or a nice not exceeding 50 million gained. Furthermore, the enterprise can’t function within the crypto sector for one more 5 years. These guidelines are relevant to each native in addition to overseas companies.

Besides, the FIU additionally has pre-set of guidelines for home gross sales actions. Last 12 months in July 2021, the FIU requested all exchanges to report their actions. But now it involves gentle that the above 16 operators of crypto exchanges have been working illegally. Speaking to native information publication News 1, an FIU official said:

“Unreported virtual asset operators may be exposed to risks such as leakage of personal information and hacking because the information security management system (ISMS), which is a reporting requirement under the Special Act, is not properly equipped, and there is a risk of being misused as a money laundering route.”

Cracking Down On Credit Card Companies

During their investigation, the FIU discovered that these crypto trade providers additionally allowed crypto purchases utilizing bank cards. However, as per the Special Act, this facility isn’t allowed for non-reported exchanges. FIU is now working with bank card suppliers to make sure that they don’t permit any crypto buy transactions. The regulator has additionally instructed them to droop transactions for non-reported operators.

Bhushan is a FinTech fanatic and holds aptitude in understanding monetary markets. His curiosity in economics and finance draw his consideration in the direction of the brand new rising Blockchain Technology and Cryptocurrency markets. He is constantly in a studying course of and retains himself motivated by sharing his acquired data. In free time he reads thriller fictions novels and typically discover his culinary expertise.

The offered content material might embrace the private opinion of the creator and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The creator or the publication doesn’t maintain any accountability to your private monetary loss.