South Korea is to ban crypto exchanges from handling digital assets it considers “dark coins”. Regulator Financial Services Commission (FSC) is specifically targeting privacy coins such as dash, monero and zcash.
● The ban is with effect from March 2021. In an update to crypto regulations under the Special Payments Act, the FSC accuses privacy coins of facilitating money laundering activities.
● It says that transactions involving privacy-oriented coins like monero (XMR) or zcash (ZEC) are hard to trace for law enforcement agencies, including the Commission itself.
● That’s because such virtual currencies use complex techniques to obscure their transactional records – mainly for the purpose of hiding them from unwanted attention, such as law enforcement’s.
● The FSC is also directing that crypto exchanges implement strict know-your-customer (KYC) and anti-money laundering (AML) policies. It requires that the platforms check these details against government-issued documents such as IDs or passports.
● The exchanges will have to report their operations to authorities six months following implementation of the guidelines.
● South Korean platforms such as Okex have since been forced to delist several privacy coins to align with the Financial Action Task Force (FATF) rules around money laundering.
● In the U.S., the Internal Revenue Service (IRS) recently awarded a contract worth $1.25 million to Chainalysis and data forensics company Integra Fec to provide it with tools that can break the privacy-focused coin, monero.
What do you think about the planned privacy coins ban in South Korea? Let us know in the comments section below.
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