These South Korean Crypto Firms Are Warming Up To Comply With FATF Travel Rule

South Korean regulatory watchdogs have made their stance quite clear with the new travel rule. No, not for COVID. As the regulatory landscape in Korea changed, crypto firms had to proactively work with regulators to avoid forced shutdowns. The latest development is making the crypto scene in Korea more transparent.

CODE-ing its way through

Several regulatory bodies have launched a joint venture to develop solutions to comply with the Financial Action Task Force (FATF) crypto travel rule. The travel rule sets a global standard for virtual asset service providers to combat money laundering and terrorist financing. It requires the exchanges to collect information from senders and recipients of crypto transactions.

South Korea’s Bithumb, CoinOne and Korbit had launched CODE, short for Connect Digital Exchanges last August. Interestingly, on February 25 around 30 South Korean crypto and blockchain companies officially partner with CODE. In a note, the report stated:

“Code announced on the 25th that it had begun to secure service partners by explaining the code system to domestic and foreign virtual asset providers (VASPs), included virtual asset exchangeswallet operatorsand keeper.”

This travel rule revealed customer information for transactions above a threshold of US$1,000† It uses blockchain to record transactions and customer data on nodes operated by affiliated entities on a distributed server.

The CODE completed interworking tests with the three big companies and was discussing and evaluating partnerships with many domestic and foreign VASPs† This included companies such as Bithumb, Coinone, and Korbit. Furthermore, CODE too assessed partnerships with various domestic and international crypto service providers.

Shin-geun Cho, Head of Business Cooperation from Bithumb claimed

We plan to actively collaborate with a number of domestic and foreign companies through code solutions with strong connectivity and scalability using blockchain.”

In addition, he added that the organization planned to expand “not only to domestic but also global” standards.” However, not all parties showed the same enthusiasm.

Pave my way

Upbit, the largest crypto exchange in Korea, took a different route. Upbit’s operator Dunamu was not a CODE member – it developed its own solution for travel rules VerifyVASP under which deposits and withdrawals would pass through a traceable travel control system after March 25. Wu, blockchain, a famous news agency tweeted this development saying:

As required, the travel rule would apply to all transactions over one million Korean Won (US$831.12).

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