South Korea: Bithumb, Upbit, and other exchanges join hands to meet “travel rule”
Four of South Korea’s largest cryptocurrency exchanges make the news today after announcing the signing of a memorandum of understanding to establish a joint venture to meet the “travel rule” of crypto assets . The four exchanges include Bithumb, Upbit, Coinone and Korbit, also the main exchanges by volume in the country.
In accordance with South Korea’s updated standards, the travel rule requires the virtual currency operator in charge of sending the crypto to provide sender and recipient information to the operator who receives the crypto. virtual currency during its transfer. The Financial Action Task Force [FATF] imposes similar rules for crypto-operators.
The companies said in a statement declaration,
“After the completion of the virtual asset activity report in September, there is not much time left before the application of the travel rule which will take effect in March of next year, so four companies showed up. to comply with international standards, participate. “
The exchanges further added,
“We will advance the period of co-development of travel rules as much as possible so that it can be officially launched later this year.”
The country added these travel rules in its revised law on specific financial information which entered into force on March 25, 2021. However, the application of the regulation was postponed until March 25, 2022, given the time and effort. Considerable devoted to building information sharing in the sector. system.
As these four exchanges move forward with the goal of complying with the changing laws, most of the other exchanges plan to take the updated laws to court. By law, every exchange is required to submit a document by September 24 showing a bank account in its real name.
Leading banks like NH Banks and Shinhan Bank conduct risk assessments on exchanges like Upbit, Bithumb, Coinone and Korbit. However, no bank is ready to accept small crypto exchanges. This will cause these exchanges to go out of business. It also forced most exchanges to consider suing the government and financial authorities.
As the regulatory landscape evolves, crypto firms may need to work proactively with regulators to avoid such forced shutdowns.