Virtual Currency Awaiting Entry into the Formal Sector…Special Financial Transaction Information Act Passed the Legislation and Judiciary Committee of the National Assembly

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The amendment to ‘Special Financial Transaction Information Act’, which includes regulations that virtual currency (cryptocurrency) exchanges must obey, passed the Legislation and Judiciary Committee of the National Assembly.

The Financial Transaction Information Act is expected to complete the law-making process after the resolution of the National Assembly plenary session scheduled on the 5th, and the cryptocurrency industry will be entered into the formal sector in Korea.

The Legislation and Judiciary Committee held a general meeting and passed a vote of the amendment to Special Financial Transaction Information Act.

The amendment to Special Financial Transaction Information Act was revised and resolved by the National Assembly on the bill proposed by a member of the National Assembly Kim Byung-wook (Democratic Party of Korea) based on global recommendations on cryptocurrency announced by Financial Action Task Force (FATF) in June last year. The revised bill includes information on cryptocurrency trading and anti-money laundering (AML) in Korea.

The revised bill defined cryptocurrency as ‘virtual asset’ and cryptocurrency exchange as ‘virtual asset service provider (VASP)’ and imposed them the same AML obligations as financial institutions.

According to the revised bill, representatives of business must set up the business after reporting their name and residence to the Korea Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC). Violators would be punished by either a fine of up to 50 million won or a maximum prison sentence of five years.

The revised bill waits for the last plenary session of the 20th National Assembly. If the revised bill passes the plenary session, the law-making process is completed and the enforcement of the amendment to Special Financial Transaction Information Act is finalized. If the revised bill fails to pass the plenary session, the bill would be automatically scrapped and should be proposed by the 21st National Assembly, which will be organized in the general election in April, to be passed again by the National Policy Committee.

Updated News) The amendment to Special Financial Transaction Information Act was passed at the plenary session of the National Assembly on March 5.

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