Cryptocurrency covered as Korea finance act passes State Council
Fixes to current legislation regarding virtual assets were voted through at the State Council meeting. Moving forward, virtual asset businesspeople must earn an Information Security Management System (ISMS) certification and implement identification procedures for transactions. The regulatory fix is going to be officially promulgated this month, and the law will take force a year from then. #Legislative fix following FATF The Financial Services Commission said Tuesday that fixes to the act on Reporting and Use of certain financial transaction information(Korea Finance Act) were passed during a state council meeting. The fixes, which were voted through during the plenary session of the National Assembly earlier this month, were introduced to follow the Financial Action Task Force's guidelines and prevent criminal activities like money laundering. #What’s inside the new legislation? According to the legislation, a virtual asset business operator must report to the Korea Financial Intelligence Unit before opening the business. For the report to be approved, the operator must receive a set of qualifications, including ISMS certification, and implement a self-identification process for transactions. The operator must follow basic anti-money laundering practices, like verifying customer identities, reporting suspicious activities and storing relevant data. It must also segregate transaction records by users. Securities firms that engage in transactions with a virtual asset operator are also obliged to check basic information related to the identity of counter-parties and verify that partners are registered with the relevant authorities. The Korea Financial Intelligence Unit is in charge of supervising all such activities, and the authority can be handed over to the Financial Supervisory Service if needed. #When does it go live? The regulatory fixes go live one year after promulgation. If promulgated in March, the regulatory fixes kick off in March 2021. Current virtual asset operators are obligated to report all necessary qualifications and make additional preparations six months after the legislation goes live.