Report: Bank Of Korea Authorized To Conduct Inspections On Crypto Firms
The Bank of Korea (BoK) can now investigate local crypto exchanges. According to a reportdoes the bank have the authority to carry out on-site inspections and even request financial records from stock exchanges operating in the country.
The main objective of the Bank of Korea is to ensure stability of prices throughout the nation. This responsibility in turn gives the bank the opportunity to control and improve the economy.
South Korean bank to monitor transaction data from local crypto exchanges
The new rights will allow the central bank to monitor the activities of cryptocurrency exchanges more closely and take action if necessary. This includes the power to issue fines and even revoke licenses if exchanges breach digital asset regulations.
The move comes amid growing concern over the potential risk cryptocurrencies pose to financial stability and the economy. The Bank of Korea is aware of these risks, such as money laundering and tax evasion, and is willing to take additional steps to limit such incidents.
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However, taking such steps requires the bank to have such authority, which it received last week from an official on the National Assembly’s political committee. The report also noted that the Federal Service Commission (FSC) will officially state the bank’s position in a subcommittee meeting on April 25. The potential meeting could also speed up the rollout of the country’s digital asset laws.
Furthermore, a lawmaker from the Democratic Party, Kim Han-gyu, said the FSC supports the central bank’s new position to request and monitor transaction data for digital asset exchanges. However, the FSC also mentioned that it would not include this incident in the bill.
Crypto regulations in South Korea
Although the legal situation in South Korea may be complex, it addresses the safety and security of the industry, including crypto investors and users. The crypto regulatory framework in the country is significantly dependent on the government’s attitude towards the industry.
As such, digital asset providers should know the government’s requirements and ensure their operations are compliant before venturing into crypto affairs in the region.
South Korea regulates digital assets use below Act on Electronic Financial Transactions. To comply with the requirements of the law, everyone Virtual asset service providers must register with the FSC. They must comply with the AML procedures, cyber security measures, real name customer verifications, etc.
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When it comes to paying taxes, 20% is tax on crypto winnings postponed until 2025. This makes it the second postponement after 2022 when it was due to take effect. The officials pushed it from 2022 to 2023 and later chose 2025 to implement it due to the market slowdown.
This latest development means that the FSC and the Bank of Korea will now investigate cryptocurrency operations in the country. It also means that they will have access to the transaction data of local crypto exchanges.
Featured image from Pixabay and chart from Tradingview
