South Korea’s government is widening its probe on cryptocurrency exchanges, particularly the use of corporate accounts which the regulators say can lead to money laundering. This announcement follows the prosecutors launching an investigation on the country’s largest crypto exchange, Upbit.
Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space
Widening the Crypto Probe
South Korea’s top financial regulators are teaming up with prosecutors to widen their investigation of domestic cryptocurrency exchange operators. An official of the Financial Service Commission (FSC) was quoted by the Korea Times on Sunday:
Following a request by the Financial Supervisory Service (FSS) and the prosecution to address growing anti-money laundering compliance concerns and possible abuse of cryptocurrencies in money laundering and fraud, the FSC is looking into exchanges’ corporate accounts opened in local banks.
The use of corporate accounts for crypto transactions should have been discontinued when the government introduced the real-name system at the end of January. However, only 30% of all crypto accounts have
been converted into real-name ones so far.
The six banks that have the ability to issue real-name accounts have chosen to only service the country’s largest crypto exchanges: Upbit, Bithumb, Coinone, and Korbit. Nonetheless, not all accounts at these exchanges have been converted into real-name ones. In addition, all small and medium-sized exchanges continue to use corporate accounts for crypto transactions.
The regulators say that the use of corporate accounts can lead to fraud such as recently seen with Coinnest whose CEO was charged with embezzlement. The largest Korean crypto exchange by volume, Upbit, is also currently under investigation even though banks have been converting its accounts to real-name ones.
Collaborating with Other Countries
South Korea has been
