South Korea's Financial Services Commission has revised AML ruling for the country's crypto platforms. The regulator asks local banks to monitor the corresponding accounts more thoroughly.
As the regulator reported, with the revision will be effective for a year, so further extensions are possible, banks may enhance supervision of all accounts opened by any trading platform.
A crypto exchange usually runs several bank accounts. In particular, one of them is used for customers' money and the other account is for the platform's own assets.
The regulator added that after the inspection at three banks (Nonghyup Bank, KB Kookmin Bank and KEB Hana Bank), it detected that some trading platforms transferred money from depositing accounts of investors to their own accounts.
As a result, these exchanges broke the rules of FSC covering that exchanges must hold their assets and users' ones separately.
"Currently, only money-collecting accounts are subject to enhanced customer due diligence (EDD) by financial institutions," the official report reads.
With only investors' accounts of exchanges being controlled, the regulator is concerned that the current situation can enable platforms to launder money or avoid taxes via buying cryptos at their operating accounts. Under the revised rules banks may monitor transactions connected with foreign exchanges. Every suspicious deal should be reported to the FSC.