Banks Lack Criteria and Capability to Evaluate
"Authorities Must Step In to Define Responsibilities Between Banks and Exchanges"
From the left, Kang Daegu, CEO of Borabit; Do Hyunsoo, CEO of Probit; Kim Seonga, CEO of Hanbitco; Lim Yosong, CEO of Coredax (Provided by Korea Blockchain Association)
[Asia Economy Reporter Minwoo Lee] Cryptocurrency exchanges facing closure threats due to their inability to obtain real-name accounts from banks despite having acquired Information Security Management System (ISMS) certification have demanded that financial authorities resolve the issue.
On the 7th, nine cryptocurrency exchanges including Borabit, Aprobbit, Coredax, Coin&Coin, Foblegate, Probit, Flybit, Hanbitco, and Huobi held a press conference at the Korea Blockchain Association’s main conference room in Gangnam-gu, Seoul, to issue this urgent statement. With just over two weeks remaining until the March 25th enforcement of the amended Act on Reporting and Using Specified Financial Transaction Information (commonly known as the Specific Financial Information Act) deadline for virtual asset service providers to register by the 24th, the exchanges expressed their desperate situation and urged financial authorities to take action.
The exchanges stated, "We invested tens of billions of won to obtain ISMS certification to meet the business registration requirements mandated by the Specific Financial Information Act and have made every effort to establish anti-money laundering systems, yet we find it difficult to accept the ongoing difficulties in concluding contracts with banks for real-name account services."
They also pointed to the financial authorities’ practice of shifting the responsibility for reviewing and evaluating exchanges onto banks and then neglecting the issue. The exchanges criticized, "Recently, financial authorities have issued press releases and guidelines suggesting that exchanges can register if they remove the Korean won trading market or that they must notify customers of partial business closures. This is an irresponsible act that ignores an industry in need of nurturing and stifles sound exchanges."
Therefore, they demanded that authorities such as the Financial Services Commission intervene to ▲ clearly distinguish responsibilities between exchanges and banks ▲ accept ISMS-certified exchanges’ applications for Financial Services Commission review and provide opportunities to supplement real-name account requirements later ▲ and resolve unreasonable entry barriers that were unforeseen at the time of the Specific Financial Information Act amendment.
A representative from one exchange pointed out, "Incidents occurring at exchanges are entirely the exchanges’ responsibility, not the banks’. Since there is no government-level evaluation standard that banks can use to assess virtual asset service providers, and banks lack the capability to evaluate the money laundering risks of exchanges, instructing banks to conduct reviews and evaluations based on existing business standards is the financial authorities shifting responsibility onto banks."
They also expressed concern that the financial authorities’ demand to remove the Korean won trading market would realistically lead to closures. Through their statement, they declared, "Cryptocurrency exchanges standing at the edge of a cliff with no room to retreat pledge that if given a fair opportunity to be reviewed by the authorities through a magnanimous decision by the financial authorities, any exchange found during the review period to have committed inappropriate acts such as security breaches or legal violations that damage the trust of the authorities and investors will voluntarily suspend Korean won trading and take clear responsibility."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
