Regulator threatens to close virtual bank accounts used for illegal activity

Lim Chang-won Reporter() | Posted : January 8, 2018, 15:24 | Updated : January 8, 2018, 15:58

[Yonhap Photo]

SEOUL, Jan. 08 (Aju News) -- South Korea's top financial regulator threatened to close virtual accounts provided by key banks to cryptocurrency exchanges if they are found to have violated rules related to money laundering.

"We will see if banks have carried out their obligations in preventing money laundering," Financial Services Commission (FSC) chairman Choi Jong-ku told reporters after regulators launched an intensive four-day probe into virtual accounts provided by six major lenders.

The six lenders under inspection include Woori, Kookmin, Shinhan, NongHyup, the Industrial Bank of Korea and the Korea Development Bank.

Choi said that financial authorities would step up an inspection of exchanges in an effort to curb a frenzy of speculative investment. "We will look into whether the exchanges have real virtual money. We will investigate their illegal activities and take strong action even before the related law is revised," he said.

Strong steps are needed to prevent the "serious" side effects of irrational and excessive speculative investments, Cho said. "I think many agree with the necessity of regulation to prevent side effects."

South Korea has become a hotbed for speculative investments since the craze for Bitcoin hit South Korea's online community early last year. Government officials have expressed concern over excessive attention on cryptocurrencies.

"South Korea should no longer be allowed to become a market leader in such abnormal trading," he said, referring to the so-called Kimchi premium in the domestic digital money market.

Regulators have vowed to impose strong regulations on domestic digital money transactions and ban anonymous virtual bank accounts.
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