South Korean regulators tell banks to open the books on cryptocurrency exchanges

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Authorities are looking to tighten their grip on the cryptocurrency industry.

Financial regulators in South Korea have asked banks to provide information on their dealings with cryptocurrency firms, a local outlet reported on Wednesday, as authorities seek to determine how many cryptocurrency exchanges operate within the country’s borders.

An unnamed regulatory body has requested that banks reveal the corporate accounts of cryptocurrency exchanges that haven’t already implemented real-name accounts for its cryptocurrency customers. Only the four largest exchanges in South Korea have thus far set up real-name accounts, while the rest have until now been operating under the radar.

“Currently, cryptocurrency exchanges can operate without permission from the government, which is why it is difficult to identify the exact number of cryptocurrency exchanges. One way to find out is to track corporate bank accounts that collect customers’ funds,” an anonymous exchange official explained to The Korea Herald.

Estimates suggest there are between 100–200 cryptocurrency exchanges that remain outside the purview of the government. Any businesses which still haven’t registered their activities by Sept. 24 will be liable to fall foul of the revised Act on Reporting and Using Specified Financial Transaction Information, and could face up to five years in prison.

The revised law will require cryptocurrency exchanges to establish appropriate security management systems, form transparent partnerships with local banks, and lodge reports with government authorities.