Korean Federation of Banks Rolls Out Virtual Asset Protection Measures
In Brief
The Korean Federation of Banks has implemented the Virtual Asset RealName Account Operation Guidelines to protect virtual asset users and combat money laundering, which includes a reserve requirement of 3 billion won (~ $2.3 million) and enhanced customer identification, transaction monitoring, and reporting of suspicious activities.
In a move designed to bolster user security and curb money laundering, the Korean Federation of Banks has launched the “Virtual Asset Real-Name Account Operation Guidelines”. This initiative, as News1 reports, comes after rigorous discussions with financial authorities and virtual asset exchanges.
The new guidelines present a key requirement for virtual asset exchanges to retain at least 3 billion won (~ $2.3 million) in reserves. These funds will serve as a safety net to cover potential user losses due to unforeseen events like cyber-attacks or system failures. The maximum reserve cap stands at 20 billion won (~ $15.7 million).
The guidelines also call for enhanced user identification during fund collection and transfers. To ensure heightened security, accounts inactive for a long period will have collection and transfer restrictions. Two types of accounts will be introduced – limit accounts and regular accounts – each with specific limits.
The guidelines put forth stringent anti-money laundering measures. Financial institutions must annually conduct an enhanced customer identification process for real-name account users. This enhanced due diligence (EDD) procedure will verify user identity and scrutinize transaction purposes and fund sources. High-risk users will be identified and suspicious transactions promptly reported.
Korean Federation of Banks’ Focus
A major focus of the new guidelines is the protection of user deposits. Newly structured standards concern separate deposit procedures, daily deposit limits, and deposit due diligence. These measures aim to boost security and eliminate potential risks.
Virtual asset exchanges plan to swiftly respond to these guidelines by beginning to accumulate the required reserves by September. They will phase in detailed procedural preparations and the setup of a robust computer system, aiming to complete these tasks by March next year. These comprehensive measures underscore the Korean banking sector’s commitment to user safety and transparent virtual asset practices.
- South Korea’s crypto industry is taking steps to ensure fair trading practices and consumer rights protection by requiring realname confirmation for deposit and withdrawal accounts associated with virtual asset exchanges.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
