South Korea to Fine Crypto Exchanges That Fail to Tackle Illicit Activity

South Korea’s Financial Services Commission (FSC) said Wednesday it will issue financial penalties to exchanges that fail to follow rules designed to curb illicit cryptocurrency activity.

• In an announcement, the regulator said it will fine exchanges that fail to follow three regulations covering internal controls, information and data retention, and identity verification of virtual asset traders.
• Exchange operators are must retain information and data connected to any suspicious transactions, including those made using large amounts of fiat currency, as first reported by Korea JoongAng Daily.
• Fines for breaches range from 30 million to 100 million won (roughly $26,000–$88,000).
• Penalties may be reduced by up to 50% under some circumstances such as erroneous breaches, the FSC said.
• South Korea is also planning to bring in a cryptocurrency tax of 20% if gains exceed 2.5 million won (US$2,200).

Read more: Bank of Korea Chief on CBDC: Better Right Than Fast