Korea Urged Binance to Implement New System to Freeze Assets
The South Korea Financial Services Commission (FSC) has instructed Binance, the world’s biggest cryptocurrency exchange, to adopt a fresh wallet identification and asset-freezing mechanism. This step is part of FSC’s crackdown on cryptocurrency exchanges that are functioning in the country, with Binance being the most recent target of the investigation.
Korean Crypto Crackdown
Furthermore, some of the leading Korean exchanges including Upbit, Bithumb, Coinone, Korbit, and Gopax, are scheduled to hold an urgent discussion with Binance and the Korean police. The primary objective of the meeting is to develop a strategy to create a mechanism that can recognize the proprietors of wallets and secure funds if they are connected to illicit operations.
The FSC of South Korea has stepped up its efforts to clamp down on money laundering and other illegal activities related to cryptocurrency exchanges. In recent months, the regulatory authority has been conducting audits on these exchanges and imposing penalties on those who violate the rules.
The FSC is still waiting for Binance to respond to its request, but Binance has been actively working on improving its compliance measures. Binance’s American division, Binance US, appointed Brian Brooks, a former US Treasury official, as its CEO in March. Brooks has been tasked with enhancing the exchange’s compliance measures and building positive relationships with regulatory bodies.
Binance has also shown a dedication to strengthening its compliance capabilities, as evidenced by the recent rollout of a Know Your Customer (KYC) system. Moreover, the exchange has taken significant steps towards enhancing its anti-money laundering (AML) protocols, as demonstrated by the adoption of a new policy in May.
The Reason for This Move
This operation has been arranged following an inquiry into the digital possessions of legislator Kim Nam-guk, which is currently under investigation within the country. The investigation uncovered that the former member of the Democratic Party possessed at least $4.5 million worth of cryptocurrency assets on the Wemix exchange. This discovery has raised concerns about possible occurrences of money laundering, conflicts of interest, and misuse of confidential information.
Significant measures have been taken by the government to address the issue of state officials owning cryptocurrency. In response to a scandal involving Congress members transferring large sums of cryptocurrency, they have implemented the “Kim Nam-guk Prevention Law“. This new law requires senior officials and lawmakers to disclose their crypto assets. Congress has given unanimous approval to this legislation.