Crypto Exchanges in South Korea, trying best to meet upcoming FATF travel rules

FATF keeping in view the mitigation of the possibility of crypto exchanges involved in money laundering and illicit activities

Well known intergovernmental organization to check on money laundering and terrorism funding, FATF or Financial Action Task Force soon to launch travel rules this Friday in South Korea. For compliance on behalf of FATF to crypto exchanges, two service providers, VerifyVASP and CODE, have signed an understanding memorandum in order to link their services before the rule goes into full effect.

The latest travel rule of the Financial Action Task Force is setting up guidelines and regulations for virtual assets service providers or VASPs, that are designed to deal with money laundering terror funding that would need crypto exchange and trading firms to collect and reveal pieces of information related to customers having transaction above the threshold of $1,000 US dollar. New travel rule compliance is to meet for all transactions over one million Korean won from March 25.

Approx thirty crypto and blockchain firms in South Korea have officially partnered with CODE. CODE is a joint venture created to meet the travel rule of the Financial Action Task Force. The travel rule solution of CODE uses blockchain for recording transactions and data of customers on nodes that are operated by member entities in a distributed network.

For now, CODE has completed testing of its solution on three shareholders: Bithumb, Korbit, and Coinone. Bithumb announced on Friday that it’s also reviewing partnerships with numerous crypto service providers, both domestic and international.

Apart from CODE, several operators use travel rule caution of VerifyVASP. For instance, the largest crypto exchange of South Korea Upbit’s operator Dunamu is not a member of CODE, so it developed its solution for travel rule, VerifyVASP. Both entities are backed by four major fully licensed crypto exchanges of South Korea. The linking of two services would allow users from above mentioned crypto exchanges transferring of their crypto assets to and from the founding exchanges.

Global exchanges are still hesitant to incorporate Financial Action Task Force travel rules because of their privacy concerns. However, South Korea would be among the first countries in the world to accept the local business conditions. Apart from South Korea, its neighboring country, Japan’s crypto exchanges, also registered under the travel rule adoption of the Japanese Virtual Currency Exchange Association (JVCEA) by 1st April.