• South Korea’s financial regulator, the Financial Services Commission (FSC), has begun a “comprehensive inspection” of the nation’s crypto exchanges.
• The FSC will probe the 20 trading platforms that do not have licenses to trade fiat KRW.
• This investigation will focus on anti-money laundering protocols and could be related to GDAC’s possible application to rejoin the KRW market.
South Korea’s top financial regulator, the Financial Services Commission (FSC), has begun a “comprehensive inspection” of the nation’s crypto exchanges.
Background on South Korean Exchanges
Under South Korean law, exchanges can offer crypto-to-crypto trading services, provided they meet certain criteria. To obtain fiat-trading licenses, however, they must form partnerships with commercial banks. These banks must provide all exchange users with real name-, social security number-verified accounts linked to their crypto wallets. The “big four” crypto exchanges – Upbit, Bithumb, Korbit, and Coinone – have had such banking partnerships in place for several years while the remaining 21 South Korean exchanges have been left to pursue banking deals with domestic banks – only one of which has been successful so far.
Focus of Investigation
Per Decenter, Financial Services Commission (FSC) specifically wants to probe the 20 trading platforms that do not have licenses to trade fiat KRW and that this is “the first time” it has conducted a “comprehensive inspection”. It is expected that this investigation will focus on anti-money laundering protocols as specified by local laws and regulations.
Start of Inspection
The FSC stated that it would begin its probe with GDAC – one of the exchanges involved last year in the controversial delisting of Wemix token created by WeMade gaming giant. Insiders believe either this may be due to GDAC’s involvement or because it is looking towards a possible GDAC application for rejoining KRW market in future.. However no date for FSC visit has yet been informed to GDAC officials currently as per media reports.
South Korea’s FSC has launched an investigation into all 20 unlicensed crypto trading platforms operating within country’s borders which will be focusing primarily on anti money laundering protocols and related matters . The first exchange under scanner currently is GDAC due its past involvement in Wemix delisting controversy or possibly due to its future plans for joining KRW market again via banking partnership