Several South Korean financial authorities plan to join forces to combat illegal operations with cryptocurrencies such as Bitcoin (BTC).
The interagency crackdown comes in response to growing concerns about speculative investment and potentially illegal activity amid the ongoing crypto market boom, Koo Yun-cheol, head of the Office for Government Policy Coordination, said Monday.
“Special attention should be paid to preventing illegal activity using virtual assets,” he said at a meeting of deputy ministers on crypto, local news agency Yonhap said.
As part of the crackdown – scheduled for June – the Financial Services Commission will require local financial institutions to step up controls on cryptocurrency withdrawals. Any suspicious activity must be reported to the state-run Financial Intelligence Unit, an agency responsible for investigating financial crimes.
Other regulators, such as the Treasury Department and the Financial Regulator, also plan to monitor cross-border crypto transactions, the report notes.
South Korea is facing strict regulations after officially enforcing the law on the reporting and use of specified financial transaction information in late March 2021. By law, local crypto exchanges must maintain relationships with local banks to ensure mandatory real-name account trading. South Korea’s national tax authority has stepped up its efforts to combat tax evasion with crypto, as reported in March.
New regulatory developments in South Korea come amid new historical highs in crypto markets last week, with Bitcoin moving above $ 64,000 on April 14. Despite record crypto prices, Bank of Korea Gov. Lee Ju-yeol argued that cryptocurrencies have “significant restrictions” as a payment method, warning that their volatile price swings threaten financial stability.