Banks in South Korea tightens approach to cryptocurrency exchanges

• The banks adopt a tough approach to crypto-related business.
• The measures are prompted by new FATF guidelines.

Four major cryptocurrency exchanges in South Korea – Bithumb, Upbit, Coinone and Korbit – report issues with a renewal of their agreements with banks, the local media outlet The BChain reports.  

Sources say that banks have developed stricter norms in response to new FATF guidelines. To renew the bank account, the exchanges will have to comply with strict anti-money laundering requirements in line with the recent recommendations provided by the inter-governmental body, the Financial Action Task Force (FATF).  

Until recently, the South Korean banks renewed accounts “without any objection every six months.” But under new FAFT guidelines, banks are “legally liable”  for money laundering activities performed by their customers. As such, they “start to place demanding requirements” on the cryptocurrency exchanges.

“In order to meet this standard, small and medium-sized trading sites that lack operating costs are likely to disappear from the market,” an anonymous official in Korea told the news source.

It is worth noting that the South Korean regulator obliged the local cryptocurrency trading platforms to compensate their customers for losses even if they are not responsible for the financial damage.

Meanwhile, the FATF provided the final version of the guidelines on June 21. G20 countries supported the FATF’s crypto regulatory guidelines and called for fast and effective implementation during the summit in Osaka.