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South Korea Creates a Working Group in Charge of Supervising the Local Cryptocurrency Exchanges

In cooperation with the Korea Financial Intelligence Unit (KFIU), the financial authorities of South Korea created a task force in charge of supervising the operations of the cryptocurrency exchanges in the country. The objective of the new task force is to make sure the cryptocurrency business operations are compliant with the current cryptocurrency regulations. In cooperation with the local cryptocurrency exchanges, the task force will try to prevent money laundering operations and fraudulent activities related with the cryptocurrency ecosystem in South Korea.

The local financial authorities will also demand that the six largest South Korean banks that support the exchanges join them in their effort to prevent illegal cryptocurrency operations by reporting suspicious activities to the KFIU. The banks, such as Nonghyup, IKB, Shinhan Bank and Woori Bank, are required to present regular reports to the KFIU about suspicious trading and prevention of financial crimes.

After the draft law to ban the cryptocurrency trading in the country was officially rejected, the South Korean government allocated a significant amount of money to regulate the local cryptocurrency market and create stable and strong infrastructure for the investors.

For several weeks now, the majority of the South Korean investors are unhappy with the insider trading started by some government officials working for the Financial Services Commission (FSC).

Last week, the Director of the FSC, Choi Jong-gu, admitted that certain employees of the Commission sold their bitcoins just before the announcement of the ban of the cryptocurrency trading made by Park Sang-ki, the Minister of Justice. The same employees rebought those bitcoins after the announcement was published.

Hong Nam Ki, the Minister for government policy coordination said: “The government is currently investigating several government officials accused of insider trading. Given that it is not appropriate for a government official to be involved in the trading of cryptocurrencies, the agency will encourage its employees to prevent it.”

After the announcement made by the Minister of Justice, the rating of the president Moon Jae-in fell below 60%, while the government suffered a lot of criticism.

The South Korean crypto investors were concerned with the latest happenings and announcements from the government. Kookmin Bank announced the closure of all virtual bank accounts used for trading on the local cryptocurrency exchanges, which raised even more concerns.

However, after six major South Korean banks expressed their support to the cryptocurrency exchanges in the country, the investors felt encouraged. Since then, the KFIU started regulating the local cryptocurrency market and the government started looking at the cryptocurrency trading as a legitimate financial operation.

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