South Korean financial institutions will be required to classify cryptocurrency exchanges as high-risk clients and subject to strengthened monitoring, The Korea Times has learned, citing the Financial Services Commission (FSC). Korean banks will deny services to clients that do not want to comply with ID verification procedures, and report suspicious transactions to the Korea Financial Intelligence Unit (KoFIU).
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The new guidelines will allegedly affect nearly 60 cryptocurrency exchanges in South Korea. Cryptocurrency exchanges will also have to submit a request for a license by September 24 to KoFIU. The regulatory measure is taken due to watchdogs concern that banks can be held liable for financial crimes at the exchanges.
As iHodl earlier reported, South Korea's National Tax Service (NTS) announced that that Korean residents who hodl cryptocurrencies in foreign trading platforms will be obliged to report their hodlings for taxation starting 2022. However, residents of South Korea will have to pay taxes only when the aggregate amount of their cryptocurrency balances exceeds 500 million won (~$447,900) at the end of each month.
The new tax obligations will come into force starting January 1, 2022, while the tax reporting will be required from June 2023. If South Korean residents violate crypto tax obligation, they will be subject to a fine of 10-20% of the amount not reported.
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