Financial regulators in South Korea, Japan and China have discussed how to regulate cryptocurrencies and are planning to cooperate to curb speculation using digital tokens, Korea Times reported.
"After inspection of cryptocurrency accounts, we've decided to impose new regulations to deal with anonymous accounts and possible money laundering," Choi Jong-ku, Chairman of South Korea’s Financial Services Commission (FSC), said.
The Korean regulator is set to carry out a joint in-depth inspection of six leading local banks that provide virtual currency accounts to investors and has already asked local banks to implement "know-your-customer" rules, a time-honored principle in the financial sector.
"We will pay extra attention on whether those banks apply protective measures for those involved in cryptocurrency trading," Choi said.
Investors are required to offer identification information if they wish to either deposit or withdraw funds. Those having active accounts on cryptocurrency exchanges have to link those accounts with a separate bank account.
“No one knows what is going on at these places that handle cryptocurrency because there is no direct regulation system in place regarding these institutions,” Choi said.
"We aim to track where the money for cryptocurrency deals came from," he said.
If banks fail to comply with the guidelines, they will be forced to shut down their digital token accounts.