SEOUL, March 25 (Korea Bizwire) — From now on, virtual asset businesses must provide details about the sending and the receiving clients when transferring virtual assets worth more than 1 million won (US$820) to a different business.
The Korea Financial Intelligence Unit introduced the new ‘travel rule’ policy on Friday.
The travel rule refers to an asset-tracking regulation recommended by the Paris-based Financial Action Task Force (FATF).
A similar regulation has already been in place in the traditional world of finance through the SWIFT global payment network.
For the first time in the world, it will take effect in South Korea’s cryptocurrency industry.
The travel rule will apply to all transferring virtual assets that are equal to more than 1 million won in value, in which the virtual asset service provider must also transfer information about the sending/receiving client, as well as the addresses of the virtual asset to the recipient.
All information about the sending/receiving clients transferred to another virtual asset service provider should be stored for five years from the completion of the transaction.
A violation of this rule will be punished by a fine of up to 30 million won.
Financial authorities warned that any violation of the travel rule may result in corrective measures for the service provider as well as penal requests against management employees.
The travel rule, however, does not apply to foreign virtual asset businesses, which affects the rule’s effective implementation.
In response, financial authorities plan to consult with businesses to allow the transfer of virtual assets to a foreign service provider when ‘the information on the sending/receiving clients are deemed to be identical, and the foreign service provider is deemed to pose a low risk of money laundering.’
H. M. Kang (email@example.com)