The regulatory area for cryptocurrencies in South Korea should be more regulated with the forthcoming laws regarding financial reporting for cryptocurrency companies in the country.
According to the Korea JoongAng Daily, South Korea’s Financial Services Commission has changed its financial reporting rules to include the cryptocurrency sector.
This change requires all crypto firms – stock exchanges, asset managers, portfolio providers and custodian platforms – to submit their transaction records to the Financial Intelligence Unit.
The Financial Intelligence Unit is the FSC unit responsible for monitoring the fight against money laundering in the economic ecosystem of South Korea.
South Korea’s cryptocurrency reporting regulation takes effect on March 25. The country’s existing providers of virtual asset services will have six months to comply with the new regulatory model.
As part of the compliance protocols, crypto service providers in South Korea must use reliable protocols to identify customers. In addition, any suspicious transaction must be reported to the Financial Intelligence Unit for further investigation into money laundering.
Virtual service providers in the country that do not comply with the provisions of the cryptocurrency reporting rule before September 24 can be fined up to 50 million won ($ 44,000) or five years in prison for their top representatives.
As of March 25, new crypto service providers wishing to establish their presence in the country must register with the Financial Intelligence Unit.
The regulation on incoming reporting on cryptocurrency is the latest in a series of laws and guidelines regarding cryptocurrency control in South Korea.
As the Cointelegraph previously reported, the National Internal Revenue Service said on Monday that it has identified more than 2,400 people who hid their cryptocurrencies to evade taxes.
Crypto exchanges already share customer data with NTS as the tax authorities seek to identify several tax evaders who hide their assets in virtual currencies.
In the meantime, in January 2021, the country’s rule on cryptocurrency fees will come into force. Capital gains tax will be levied on trading in profits over cryptocurrencies over $ 2300 under the law.