FSC “FATC final recommendation plan to be actively put in use”

With the Financial Action Task Force (FATF)’s adoption of international standards on crypto assets, crypto exchanges from now on have to be licensed or registered with their country’s financial authority to do business. They are also subject to anti-money-laundering obligations on par with traditional financial services firms. If they fail to comply, business licenses will be canceled. The Korea Financial Intelligence Unit (KFIU) said Monday that FATF’s recommended standards on crypto currency, announced Friday, would be referred as domestic laws are revised. The KFIU attended the third plenary of the 30th FATF meeting held in Orlando, United States between June 16 and 21, along with the Ministries of Justice, Foreign Affairs, the National Tax Service, Korea Customs Service and the Financial Supervisory Office. FATF’s final announcements In the recent meeting, binding interpretive notes and non-binding guidance were issued. A joint statement was also issued. Adoption of Interpretive Note to Recommendation 15 on crypto assets The meeting decided on an international standard that applies to all countries with binding force. Every crypto asset exchange should receive permission from or be licensed or registered by the government in the jurisdiction in which they operate. People with criminal records are prohibited from entering the business. Unregistered business activities will be restricted. Exchanges will be supervised by the country’s financial authorities. The state will have the right to impose effective, proportional and suppressive restrictions in the vent of violations. As a preventive measure, exchanges have certain obligations, including customer due diligence and suspicious transaction reporting. Just as with traditional financial firms, information on the remitter and receiver involved in the crypto currency transaction will be collected and retained. When necessary, exchanges should offer user information to the state. Guidance on Crypto Assets and Providers A non-binding guidance was published to assist countries and stakeholders with respect to virtual asset products and services. The Financial Services Commission said that once the “Law on Reporting and Using Specified Financial Transaction Information” is revised, the clauses from the guidance will be incorporated. ③ A joint statement was issued In a statement, the FATC urged countries to swiftly place the international standards into effect, noting that criminals and terrorists could use crypto assets and that the threat is grave and urgent. While countries are advised to establish permit and registration procedures, the statement said it is possible for each country to set up crypto asset-related restrictions on their own. Progress on the legislation and the level of fulfillment among crypto asset exchanges will be monitored. Results will be reviewed at a plenary session June next year. Standards set last week will be reported at the G-20 Summit slated to take place on the 28th. Jess' note Lawmaker Kim Byung-wook’s revision plan for the “Law on Reporting and Using Specified Financial Transaction Information” is an update using FATF standards from last year. The revision bill’s key points are obligating the exchanges to register users, restrict accounts lacking the user’s real name and block access to users with criminal records. But its implementation is being delayed as lawmakers continue to debate at the National Assembly. Now that the FATF’s guidelines have arrived, there should be swift progress to pass the “Law on Reporting and Using Specified Financial Transaction Information.”

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