At a meeting of the Political Affairs Committee of South Korea, industry experts opposed tougher KYC procedures and reporting requirements for cryptocurrency transactions.
South Korean regulations require cryptocurrency exchanges to register with regulators and only serve those users who have gone through the KYC procedure.
In October, the South Korean government announced that the volume of illegal international transactions with cryptocurrencies in the country increased 40 times in 2021. Many MPs expressed concerns that cryptocurrencies could contribute to tax evasion and money laundering.
The South Korean Political Affairs Committee held a public meeting on November 16, local sources said. The committee heard the arguments of legislators and participants in the cryptocurrency industry against introducing too harsh measures, as well as opinions on various bills related to digital assets.
Lawyer Yoon Jong-soo said that due to the rapid proliferation of cryptoassets, it will be difficult for organizations to verify large amounts of data on the senders and issuers of digital currencies, as well as track money laundering risks.
The South Korean Blockchain Association believes that tight restrictions on cryptocurrencies could stifle the development of the industry. Therefore, the Association announced the need to pass laws on cryptocurrencies that will ensure the protection of users and will contribute to the development of the digital currency industry.
Recall that in June, the Financial Services Commission of South Korea (FSC) demanded that local banks stop providing services to traders and exchanges that do not comply with the KYC and AML procedures. The tightening of requirements has led to the closure of about 35 trading floors in South Korea.
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