After subjecting crypto exchanges to some of the most restrictive regulations in the world, the Decentralized Finance (DeFi) and Non-Fungible tokens (NFT) are next in line to face scrutiny in South Korea. Don’t let this trick you. The ‘land of the morning calm’ is not planning to follow China’s decision to ban crypto. Instead, they want to have a strong regulatory framework in place.
Kim Jeong-Gak, head of the Financial Intelligence Unit (FIU), South Korea, hinted that they were monitoring future recommendations about NFTs and DeFi from Financial Action Task Force (FATF). He also added that the nation would be aiming for “international consistency”.
“We will consider how to regulate the two sectors with related ministries and reflect these decisions with amended financial law.”Kim Jeong-gak, head of the Financial Intelligence Unit
Kim also warned the crypto exchanges, which were already coping up from the previous blows, to keep abiding by the regulations or to pack up. He also traced that the FIU intended to “manage and supervise virtual currency exchanges under the same strict standards as banks.”
He also suspects that money laundering in the crypto space is more likely than in centralized institutions like banks.
This announcement came as a byproduct of what crackdown was going on in South Korea swallowing crypto exchanges. When new regulations for crypto exchanges hit the deck, the South Korean government analyzed that only 28 exchanges met the preliminary requirements under the new law. The law makes it necessary for an exchange to obtain a certification from the Information Security Management system (ISMS), a financial regulator in the country.
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