Money laundering is one of the risks associated with use of cryptocurrencies. South Korean cryptocurrency exchanges are committed and determined to eliminate this risk from the industry. To achieve this goal, they are ganging up to pool data from all existing and potential customers.
South Korean Cryptocurrency Exchanges Fight Money Laundering
Money laundering is by far one of the main risks associated with cryptocurrencies. Exchange platforms are exploited for this purpose but not anymore. Reports indicate that Bithumb, Coinone, Upbit and Corbit have signed a deal that will see them share wallet information of their customers in real time. They will also share suspicious activities that could be associated with pyramid schemes and phishing attempts.
This comes a few months after the government of South Korean attempted to cripple cryptocurrencies activities in the country. The attempt was met with deafening resistance from companies and investors who have invested millions of dollars into the industry.
This news comes a few days after the anti-money laundering rules in the country were amended. The revised regulations require all financial institutions that provide financial services in the country to tightening up their monitoring systems when dealing with cryptocurrency exchange platforms.
Cryptocurrency Industry in South Korea
Cryptocurrency exchange platforms in South Korea have hit the headlines for good and bad reasons. For example, one of the exchange companies based in the country, Youbit, filed for bankruptcy after it was hacked twice and millions of dollars were stolen in form of cryptocurrencies.
Upbit offices located in Seoul were raided in May last year by investigators from Financial Supervisory Service. FSS alleged that the exchange provided wrong information to investors that resulted in some of them making the wrong decisions. A thorough audit was conducted and the exchange was found to be innocent.
Coinrail and Bithumb were also hacked in June 2018 and it is estimated that both platforms lost more than $60 to hackers. The most recent case involved Komid exchange; two of its executives are currently serving jail time after they were found guilty of providing wrong trading volume to investors in a bid to lure them to invest.
Despite the negative publicity, South Korean cryptocurrency exchanges are determined to change the tide by cushioning themselves from money laundering and other risks associated with trading of digital currencies. South Korean government has also shown tremendous support for the industry by creating regulations that are meant to control the industry.