For Shirking Regulatory Responsibility
The revised Act on Reporting and Use of Certain Financial Transaction Information is predicted to lead to a shutdown of multiple cryptocurrency exchanges. Under the circumstances, it is predicted that the exchanges will sue the South Korean government. According to the act, each exchange must submit a document by Sep. 24 showing that a real-name bank account has been given by a bank.
At present, domestic banks are reluctant to extend their business partnerships with cryptocurrency exchanges in order to protect themselves from the possibility of involvement in money laundering. Although K Bank, NH Bank and Shinhan Bank are conducting risk assessment in relation to the four major exchanges of UPbit, Bithumb, Coinone and Korbit, the same assessment is not in progress in the other exchanges.
A number of exchanges are currently considering lodging a constitutional appeal against the government and the financial authorities. According to them, it is the government and the authorities that are responsible for cryptocurrency and exchange verification, and yet they are shirking their responsibilities by passing the buck to banks.
“These days, banks are refusing to initiate their cryptocurrency exchange verification processes without clear reasons and most exchanges are failing to get a chance to prove themselves,” one of them explained, adding, “The Financial Services Commission needs to step in right away.”