Korea\’s financial intelligence department will conduct on-site inspection on GDAC of the exchange on March 6

On March 2, the Financial Intelligence Unit (FIU) under the Korea Financial Services Commission (KFSC) will start on-site inspection of the GDAC of the country’s currency market exchange on March 6, mainly for the establishment and operation of the anti-money laundering (AML) system. This is the first time that the financial authorities have conducted a detailed inspection of the currency market exchanges through on-site inspection. GDAC Exchange received the notice from the regulatory authority on on-site inspection on February 23.

Interpretation of this information:

South Korea has been known for its strict regulations regarding crypto trading, particularly in the areas of KYC (know your customer) and AML (anti-money laundering). On March 2, the country’s FIU under the KFSC announced that it will begin an on-site inspection on the GDAC exchange starting March 6. This inspection will scrutinize GDAC’s establishment and operation of its AML system.

This is an important step for the Korean government as it represents the first time that financial authorities have conducted a more detailed inspection of crypto exchanges through on-site checks. This move aligns with the country’s mandate to regulate the crypto industry more comprehensively, as changes to the relevant laws have been implemented. These changes have made it more challenging for exchanges and companies to operate, but they allow the government to ensure that regulations are better followed and the industry is more legitimate.

GDAC Exchange’s receipt of the notice on February 23 means that it has one week to prepare for the inspections. It is likely that the exchange will be closely scrutinized for any potential defects in its AML system. The investigation will focus on measures that GDAC has implemented to prevent money laundering, terrorist financing, and other illicit activities. Compliance officers will evaluate whether these measures meet regulatory guidelines to prevent any possible criminal activities.

This development reflects South Korea’s commitment to preventing fraud and protecting its citizens, particularly since crypto trading in the country has become increasingly popular. Last year, the South Korean government had already toughened its stance on cryptocurrency exchanges, making it mandatory for exchanges to have direct links to the bank accounts of their customers. This move was made to prevent anonymous transactions and help protect the users of these platforms.

In conclusion, the on-site inspection of the GDAC exchange is a significant move by the Korean government towards strengthening its AML policies in the country’s crypto industry. As more people turn to digital assets for investment, it’s significant for regulators to ensure that exchanges have robust AML systems in place to help protect against fraud and other criminal activities. While it remains to be seen what GDAC’s inspection results will be, the move is a clear indication of South Korea’s commitment to becoming a leader in regulating cryptocurrencies and their trading platforms.