South Korea's National Assembly has just passed an amendment that would officially bring cryptocurrencies under the country's legal system.
The amendment, which aims to amend the current Act on Reporting and Use of Specific Financial Information so that it includes crypto businesses, has been drafted taking into consideration the recommendations published last summer by the Financial Action Task Force (FATF).
If approved, the new version of the law will require all local crypto companies to meet strict customer verification (KYC) and anti-money laundering standards (AML). Thus, crypto firms will have to report the identities of their users as well as the transactions they perform on their platforms.
In addition, exchanges, wallet providers and blockchain projects that have carried out ICOs will now have to cooperate with a local regulated bank to verify the real names of the participants in the token sales as well as the information regarding their bank accounts.
According to the proposed new version of the law:
"This is to impose obligations to effectively prevent money laundering and public threat financing from virtual asset providers, and to prescribe matters to be followed when financial companies conduct financial transactions with virtual asset providers."
South Korea is currently one of the most active countries in the crypto sector in Asia, with around 70 crypto exchanges. Until now, the industry had been operating in a grey area; however, the approval of this amendment would officially bring cryptocurrencies under the country's legal system.
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.