June 14, 2021 | AtoZ Markets- The Financial Services Commission FSC of Korea, has said that all cryptocurrency companies must apply for their license before September 24 this year, and all cryptocurrency clients must register an identification on a mandatory basis.
South Korea has been increasing its efforts to regulate the growing cryptocurrency industry.
The Financial Services Commission (FSC) has ordered banks to classify cryptocurrency exchanges as high-risk clients, and also ordered them to strengthen the monitoring of all financial transactions.
Also, asked that companies asking their clients their user identification, reported The Korea Times.
The guideline is a regulatory action set to affect around 60 crypto exchanges operating without FSC permission, aimed at protecting customers against fraud and allowing them to get their money back if the exchanges shut down in the future.
The lenders will have to deny services to customers that refuse to comply with ID verification procedures, and report suspicious transactions to the Korea Financial Intelligence Unit (KoFIU), an anti-money laundering unit under the FSC.
FSC Concerned About Cryptocurrency Risks
Meanwhile, banks are seeking to limit their crypto management responsibilities by setting up a rule that would exempt them from punishment in cases of financial crimes with no premeditation at play.
It has also been known that in reference to this issue, the discussion will be led by the Korea Federation of Banks, joined by a number of commercial lenders.
Menwhile, whether the regulatory move will dramatically reduce the number of altcoins remains to be seen.
Unlike investors around the world that mostly trade bitcoin, over 90 percent of crypto investments in Korea are made in altcoins, long criticized for a lack of accountability and high risk of losing money.
What Are Altcoins
We can say that an altcoin is an alternative cryptocurrency to the traditional and more popular ones, that is, bitcoin, litecoin and ethereum.
Currently, this type of investment is on the rise due to the volatility of the cryptocurrency market, which carries many risks for clients.
Also, with an altcoin, transactions are much faster, and they tend to be less volatile in general than bitcoin, maintaining a higher level of security for some traders.
In addition, alternative cryptocurrencies have an influence on the process and scope of the blockchain.
Popular examples of altcoins are Ethereum, BNB, Cardano, Dash, Monero, Zcash, Dogecoin, Faircoin, Namecoin, Nano, XRP, Steem, Litecoin, Tether, and Bitcoin Gold.
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