The meeting focused on the operational difficulties faced by firms as they try to meet new regulatory requirements by a 24 September deadline.
South Korea’s FSC (Financial Services Commission) has reportedly met with 20 crypto exchanges for the first time to engage on regulatory changes being imposed on the sector.
Last week, the FSS (Financial Supervisory Service) – which falls under the FSC – was designated as the agency in charge of regulating and supervising the virtual assets market.
The FSS will oversee the regulatory measures introduced for the crypto industry, including AML rules imposed by the Act on Reporting and Using Specified Financial Transaction Information.
The Act took effect from 25 March, giving crypto exchanges until 24 September to meet a requirement to be registered with KoFIU (Korea Financial Intelligence Unit), or face regulatory sanctions, including possible operational bans.
KoFIU registration requires crypto exchanges to obtain Information Security Management System (ISMS) certification from the Financial Security Institute or KISA (Korea Internet and Security Agency), and the ability to verify real-name bank accounts for their customers.
The Korea Times reports that only the 20 crypto exchanges that have received ISMS certification were invited to attend the 3 June meeting with regulators. Currently there are 60 crypto exchanges in Korea.
KoFIU is said to have requested the meeting to provide information and consulting on business reporting requirement procedures ahead of the 24 September registration deadline, and to clear up uncertainties concerning the government’s guidelines about business declarations and taxation.
Of the 20 crypto exchanges that attended the meeting, only the four largest – Upbit, Bithumb, Korbit and Coinone – have secured arrangements with banks to be able to verify the real-name accounts of their customers.
The 16 other exchanges expressed difficulties in meeting the real-name trading requirement, among other operational difficulties. The FSC said it would not interfere with the exchanges’ relationships with banks.
KoFIU said it hopes to receive the registration applications before 24 September deadline to prevent any consumer confusion and damage.