In accordance with the new requirements for the registration of cryptocurrency exchanges in South Korea, employees caught trading on the employer’s platform face a fine of up to 100 million baht ($ 89,844).
According to a statement from the South Korean Financial Services Commission (FSC), on June 3, the agency’s Financial Intelligence Unit met with executives from major South Korean cryptocurrency exchanges to brief them on the updated requirement.
South Korea’s revised Financial Transaction Reporting Act (FTRA) requires all cryptocurrency exchanges to be registered with the Financial Intelligence Unit by September 24, 2021. However, registration is not an easy process. Exchanges must comply with strict conditions, including establishing partnerships with commercial banks and approving AML and KYC.
All exchanges not registered by the deadline will be closed. The agency also said that listed exchanges whose managers or employees are caught trading on their own platforms after the deadline will be stripped of their registration status.
Upbit, one of the largest exchanges by trading volume, now allows employees to trade on their platform, however, they are prohibited from conducting transactions with any cryptocurrency other than BTC, ETH and USDT. Company employees are prohibited from trading other cryptoassets regardless of which platform they use. In addition, Upbit employees must communicate how much cryptocurrency they own and how much profit they make from each transaction. There is also an undisclosed annual limit on trading volume.
Bithumb, another major South Korean exchange, only allows its employees to trade new cryptocurrencies for 72 hours after the crypto assets are listed on the exchange. Trading during business hours is also prohibited. In addition, Bithumb requires all employees to sign an agreement that they will not use the company’s information and data for personal trading profits.
At the end of May, small cryptocurrency exchanges in South Korea began to fear that the reluctance of banks to cooperate with them would complicate compliance with regulatory requirements of regulators and lead to the closure of trading floors. Recall that recently the South Korean Internal Revenue Service announced that from 2022, individuals and legal entities holding large amounts of crypto assets on foreign exchanges will be required to submit tax reports.