The Bank of Korea (BoK) wants to monitor cryptocurrency transactions made through bank accounts registered with citizens’ real names, reports the Korea Herald.
According to documents sent to politicians, the BoK explained, “The [cryptocurrency] market has been growing at a fast pace and this could negatively affect the stability of the financial system.”
BoK said it hopes to enforce Article 87 of the Bank of Korea act. This would allow it to collect information from financial institutions and monitor transactions made through South Korean bank accounts.
If approved by policymakers, this would enhance the state’s ability to monitor an individual’s activity and crackdown on crypto-related crime.
Time’s tight for smaller exchanges
In April, South Korean crypto exchanges were given less than six months to implement strict anti-money laundering rules.
An amendment to the country’s money reporting laws came into effect in March, requiring exchanges to partner with banks. As part of the new rules banks:
- Bear greater responsibility for screening crypto exchanges for “financial soundness.”
- Hold culpability for illegal activity discovered on crypto exchanges.
- Remain liable to fines over potential illegal crypto activity.
The new measures have caused problems for many smaller exchanges that are unable to get backing from a bank.