Korean Blockchain Association Sets Guidelines to Help Self Regulate.
Korean Blockchain Assocition Sets Guidelines
In a press conference in Seoul on Tuesday, the Korea Blockchain Association said that the trade records of virtual currency exchanges are being recorded. These regulations are meant to help in the integrity and transparency of operations.
Virtual currency exchanges in Korea have faced various criminal activities like money laundering since they started their operations. At the beginning of this year, virtual currency exchanges faced numerous scrutiny and blame from the government and other authorities. This forced virtual currency exchanges in Korea to unite and form the Korea BlockChain Association. Since its formation in January, the association has been effective in creating new regulations, monitoring the activities of the exchange and curbing criminal activities in the region.
Korea blockchain association will inspect 14 virtual currencies in the efforts to making them a safe place to trade in. These include Bithumb, Gopax, OKCoin, Coinone and more.
Details of the New Regulations
According to the new regulations, all exchanges are required to perform an identity verification process for all their users. Each individual is required to provide documentation like a government-issued identification card or passport and a utility bill or any other documentation that might help verify their address or location. Once the identity verification process is completed, the exchange in question is expected to keep a 5-year record of their users’ transaction. All exchanges are also to comply with the government’s Anti-Money Laundering Guidelines.
Apart from keeping records, the exchanges are also expected to do a self-regulation of their process. The exchanges are also required to have an FDS system. This system enables the exchanges to identify any money laundering or fraudulent activities in their platforms. On realizing such activities, the exchange has been given the mandate to take the appropriate action and notify relevant authorities.
Exchanges that trade in initial coin offering (ICOs) are expected to have an internal rating system. This will also include a listing procedure and a white paper. The white paper should give users and other individuals basic information about the ICO virtual currency. It will also help users know the ICO pricing details especially if the price exists in the foreign exchange.
The associations expect members to submit financial statements, audit reports and shareholders listing. They are also expected to have equity capital of about 2 billion won ($1.8 million) or more.