South Korean Regulators May Suspend Exchanges’ Corporate Bank Accounts
South Korean financial regulators may move to suspend the corporate bank accounts of the country’s small- and medium-sized cryptocurrency exchange platforms.
A special unit of the Financial Supervisory Service is currently working with the Financial Services Commission as part of a series of on-site inspections at three of the six major banks that adhere to the government’s anti-money laundering guidelines.
Per the guidelines, banks must check every transaction made by individual account holders in special, real-name, social security number-verified bank accounts. However, for convenience’s sake many smaller exchanges enable transfers to customer bank accounts via their corporate accounts. The regulators said they “needed to look into the matter” before a final decision is made.
However, in the wake of last week’s arrest of two small- and medium-sized cryptocurrency exchange CEOs, including Coinnest’s Kim Ik-hwan, exchanges are finding themselves under closer scrutiny. The CEOs were charged with embezzlement and fraud, and are said to have misappropriated customer funds – possibly through corporate accounts.
Media outlet Money Today quotes an anonymous financial regulator official as saying, “This is our first on-site inspection since the anti-money laundering guidelines were issued. We will be looking into the corporate accounts of any small- and medium-sized exchange that displays poor management ability.”