The threat of money laundering in the crypto space has been a long-standing fear for authorities for a long time and over the years; crypto exchanges have made significant progress in tackling the problem. In an unprecedented move, the biggest crypto exchanges in South Korea have now come together in an initiative that seeks to combat the scourge of money laundering. Upbit, Bithumb, Korbit, and Coinone announced last week that the four exchanges are going to establish a hotline so that they can share real-time information regarding any eyebrow-raising trade on their exchanges.
South Korea is one of the biggest crypto markets in the world, and despite efforts from crypto exchanges, money laundering remains a hazard. According to the announcement made by the exchanges, they will monitor transactions that they suspect of being part of money laundering operations, pyramid schemes, predatory lending, and other associated malpractices. This move comes following calls from the Korean Bar Association in November last year to introduce blockchain regulations and ensure that no illegal activities take place about cryptocurrencies. The Korean Bar Association President Kim Hyun had said at the time, “We urge the government to break away from negative perceptions and hesitation, and draw up bills to help develop the blockchain industry and prevent side effects involving cryptocurrencies.”
Over the past year or so, the problem of money laundering related to cryptocurrencies has been taken very seriously by the South Korean authorities. In June of 2018, the financial regulator of the country ordered banks to be far more stringent in their monitoring of bank accounts that are tied to accounts in crypto exchanges. The setting up of the hotline by the 4 major cryptocurrency exchanges in South Korea is definitely a step in the right direction for the future of the industry in the country. It is believed that the absence of such fraudulent transactions in the exchanges will also encourage newer customers to invest in cryptos.
In the same announcement, it was also stated that the 4 exchanges would also manage a database of dodgy wallets so that they can identify scam artists who often use several exchanges to facilitate big transactions as part of their elaborate scams. Last but certainly not the least, the 4 exchanges also urged other exchanges in South Korea to join their initiative, and if that happens, then the South Korean crypto market will be better off.