South Korean regulators recently launched an investigation into the country's cryptocurrency exchanges. Originally, the Financial Supervisory Service spearheaded the investigation to examine exchanges' activities. Now the FSS has invited the Financial Services Commission into the mix, and the FSC accepted the invitation. Adding the FSC into the mix gives South Korean regulators more power to investigate the exchanges.
What Will The FSC Provide To The Investigation?
The FSC joined the investigation with an official announcement on May 13. In the investigation, FSC officials will analyze bank accounts related to exchange operators. Regular checks will be performed to ensure crypto exchanges follow anti-money laundering standards set forth by law. Officials would check and confirm compliance with other anti-fraud measures as well. With the FSC, the FSS-led investigation holds a lot of power.
An Immediate Reversal From One Week Ago?
Some people might recall Yoon Suk-heun becoming FSS chairman on May 6. When he spoke about cryptocurrencies, he spoke well of cryptocurrencies and their possibilities. Yoon mentioned that South Korean officials wanted to regulate cryptocurrencies and accept them as a mainstream instrument. With that in mind, many people might see this a major reversal from Yoon's original statements, but that's not necessarily the case.
FSC Vice Chairman Kim Yong-beom wants regulators to coordinate their approaches to regulating cryptocurrencies on a worldwide scale. Likewise, he told reporters that South Korea's probes into cryptocurrencies doesn't mean the country disapproves of them. Kim instead pointed out that the FSC is actively looking for ways to utilize the blockchain and cryptocurrencies in general.
According to Kim, South Korea's investigation helps further the country's goal of regulating cryptocurrencies. Regulators want to figure out the logistics of cryptocurrencies by implementing regulations first. Then the country will focus on integrating cryptocurrencies and blockchain into existing financial institutions. Therefore, the investigation doesn't hurt the long-term prospects of cryptocurrencies.
Analysts see South Korea's moves as a crackdown on cryptocurrencies. In the end, the FSC/FSS investigation is looking for signs of fraud and money laundering. A crypto exchange or two might find themselves caught in the fallout. It appears that legitimate crypto exchanges following the law have nothing to fear, though.