Bithumb Partners With Chainalysis Amid New Korean Regulations
Bithumb has announced its new partnership with crypto forensics firm Chainalysis. The leading South Korean crypto exchange gave the announced last Sunday following the passing of the new Korean crypto regulations.
Bithumb hopes to use Chainalysis “Reactor” Investigations software to examine all suspicious activity on its platform in a bid to adhere to Korea’s new Special Financial Transactions Information Act.
The amended act clearly states that South Korean Crypto Exchanges must adhere with the new regulations on or before 2021. There are specific provisions that will come into effect in 12 months, while new apparatus expected to be completely integrated after an additional six months.
Bithumb’s head of compliance, Sungmi Lee, foresees the furtherance of the new act and predicts lawmakers to further strengthen the new legislative apparatus in the coming years. “We anticipate further updates following last week’s vote making it even more important for us to have support available in our local language.”
The Price For Non-Compliance
Korean exchanges are now mandated to report their entire operations to the country’s Financial Intelligence Unit. Failure to do this, as well as acquire real name-confirmed accounts from banks could lead to $42,000 worth of fines, or five years in prison.
Furthermore, exchanges must also be certified and accredited by the Korean Internet Security Agency (KISA). Mind you, acquiring the KISA certification is no mean feat. It involves lots of time and expense, among other things. These restrictions mean only four Virtual Asset Service Providers (VASPs) in the country have attained their KISA Certification. The only four VASPs to complete the process include; Korbit, Upbit, Bithumb and Coinwon.
Chainalysis’ chief revenue officer, Jason Bonds, stated, “As cryptocurrency use in South Korea continues to grow, new regulations such as this will make blockchain analysis solutions like Chainalysis vital for compliance.”
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