Choi Jong-Ku, the commissioner of the Financial Services Commission (FSC) of South Korea, reestablished that no issues exist that are related to the compliance and security in the process of banks providing virtual bank accounts to local cryptocurrency exchanges.
Commissioner Choi further emphasized at the state affairs audit conducted by the government of South Korea, that as long as cryptocurrency trading platforms are well equipped with Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, digital asset platforms will be able to obtain banking services from the country’s commercial financial institutions.
“There exists no issue in banks providing virtual bank accounts to cryptocurrency exchanges. If digital asset trading platforms have KYC and AML systems in place, there is no problem in issuing virtual bank accounts to exchanges,” commissioner Choi said.
Crypto exchanges in South Korea utilize a unique system labeled virtual bank accounts that allow users to deposit and withdraw the South Korean won instantly, resulting in users capable of holding KRW on exchanges robustly. Throughout the beginning of the year, the government of South Korea began encouraging banks to avoid working with cryptocurrency exchanges, in hopes that it would eliminate the possibility of laundering money using digital assets.
CCN noted that even Nonghyup, a major commercial bank in South Korea that has worked with crypto exchanges for over a year, was also pressured to end its services to Bithumb and other major cryptocurrency exchanges. However, with commissioner Choi’s public statement, it provided clarity regarding the stance of the government and local financial authorities towards cryptocurrency exchanges. The public statement release also clarified that the local digital asset trading platforms will no longer deteriorate from the lack of banking services from major financial institutions in South Korea.
South Korea Blockchain Association expressed its optimism towards the newly established stance of the FSC, adding that the primary problem related to KYC and AML, introduced by the FSC 10 months ago, is resolved.