Blockchain media association held a cryptocurrency public hearing

Recent regulatory revisions have made it necessary for cryptocurrency exchanges to increase transparency. The Korea Financial Intelligence Unit (KoFIU) announced that it will place cryptocurrency exchanges under a system of direct regulation with the goal of increasing transparency. At a public hearing held Tuesday, Lee Tae-hoon from KoFIU said, “We can raise the transparency of virtual assets by transforming regulations from indirect to direct.” The latest public hearing was held to celebrate the opening of a blockchain media association, attended by Rep. Kim Byung-wook of the ruling Democratic Party, Lee Sung-mi from Bithumb, Lee Tae-hoon, Ko Ran from JoinD and Jeong Myeong-su from Decenter, which also deals with blockchain news. A new reporting system In line with the anti-money laundering proposed in June, the Financial Action Task Force (FATF) proposed the introduction of a reporting system. “FATF’s regulation is a mandatory provision that suggests the need to evaluate and take measures on the dangers of money laundering and financing of terrorisms via financial companies,” said Lee Tae-hoon, stressing that damaged reputations are lethal to financial companies that operate based on trust. Support for a reporting system Korea is yet to introduce a revision that reflects the FATF recommendation. The revision, which is pending at the National Assembly, is a combination of proposals from Rep. Kim Byung-wook in March, Rep. Kim Su-min of the minor opposition Bareunmirae Party in June and Rep. Je Youn-kyung of the Democratic Party in March. They jointly suggest the need for cryptocurrency exchanges to adopt a reporting system and the need to possess real-name accounts. Rep. Kim Byung-wook’s revision also includes the travel rule, as it was proposed after the proposal from FATF was released. The travel rule is a longstanding requirement for financial institutions, including virtual currency exchanges, to collect and pass specific customer information to the next financial institution when sending each other money on a customer’s’ behalf. Unrealistic? Some argue the FATF proposal and other relevant proposals pending at the National Assembly don’t work together. Whether cryptocurrency remittance companies should follow the recommendations is not clear due to the vague definition of P2P and decentralized exchanges. According to the revision, only the four cryptocurrency exchanges that have been given access to the real-name account system — Bithumb, Upbit, Coinone and Korbit — can file a report. This could cause a monopoly and weaken market competition. “Proposing clear requirements and giving fair evaluation will be important when it comes to endowing the real-name account system,” said Han Seo-hee, a lawyer from Barun Law. “When the revisions … first came out, the travel rule was not clear,” added Lee Tae-hoon. “Regulations will be enforced after assessing the details of industrial and technological development.” The need for measures before the revisions There is a year grace period even after revisions are enacted. But in a situation without clear regulations, domestic cryptocurrency exchanges are repeatedly established and scrapped. “The need to legalize is to protect investors,” said Jeong Jae-wook from the Korean Bar Association. “How many cryptocurrency exchanges are able to follow the rule if they are also responsible for anti-money laundering efforts through the revision? Measures to protect users need to be made by making insurance mandatory.”

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