South Korea’s central bank plans to track cryptocurrency transactions of local traders. For this, the data of bank accounts linked to real names will be used.
According to local media reports, the Bank of Korea intends to obtain such legal authority under section 87 of the Central Bank Law. This law allows the central bank to request the necessary information from financial institutions.
The Central Bank of Korea believes that illegal transactions with cryptocurrencies pose a great threat to the country’s monetary policy, so the regulator intends to conduct more careful monitoring of such transactions using bank accounts. The Bank of Korea has already sent the relevant document for consideration to the country’s legislative bodies. If the proposal is approved, the central bank will be able to track transactions with cryptoassets as early as September this year.
The Financial Services Commission of South Korea (FSC) and the Financial Intelligence Unit (FIU) are closely monitoring the development of the digital asset market with a steel grip. Traders are required to use registered bank accounts, and cryptocurrency exchanges operating in South Korea are required to report all suspicious transactions to regulators. Marketplaces are also required to register with the FSC, otherwise the managers of such services could face up to five years in prison or a large fine.
Due to the tightening of regulation, the OKEx cryptocurrency exchange was forced to close its division in South Korea. The country’s tax authorities are also “tightening the grip” – from January 2022, a 20% income tax on cryptocurrencies will be introduced for traders if their annual profit exceeds 2.5 million Korean won. However, the local population’s demand for digital assets continues to grow. According to IGA Works, South Korean users prefer to invest in bitcoin and altcoins, which are among the top ten by market capitalization.
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