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Bank of Korea seeks to monitor cryptocurrency transactions

Bank of Korea plans to monitor cryptocurrency transactions

The Bank of Korea (BOK) seeks government authorization to track cryptocurrency transactions made through bank accounts as reported by the local newspaper The Korea Herald last May 13. The bank submitted a document to Representative Choo Kyung-ho of the main opposition People Power Party detailing its plan to monitor the volume of cryptocurrency transactions made through bank accounts by requesting documents from financial institutions.

In the document, the BOK cited Article 87 of the Bank of Korea Act which states that they can request these materials especially if they ‘deem it necessary for the implementation of its monetary and credit policies’.

Due to the rising popularity of cryptocurrency in East Asia, especially South Korea, the BOK warned the government that this could negatively affect the stability of the financial system. With the fickle nature of cryptocurrencies and their high risks, the bank is concerned that it might cause changes in the country’s economy.

Aside from the central bank, other government agencies in South Korea have also taken various measures to monitor crypto-related activities.

The Financial Services Commission has required all financial institutions and cryptocurrency exchanges to improve the screening process of online currency transactions. This is in connection with the countermeasures of the government to put a stop to illegal crypto activities, according to a report by crypto news site CoinDesk last April 21. Meanwhile, The Financial Intelligence Unit is focused on finding any traces of illegal flows of funds.

By September of this year, cryptocurrency exchanges are expected to be registered as virtual asset service providers (VASP) to ensure their legality in operating cryptocurrencies. Moreover, these crypto trading platforms are required to show receipts from online transactions to tax authorities at the beginning of next year.

Meanwhile, the crypto trading market of Bitcoin (BTC) in South Korea has been constantly changing. It reached an all-time high record last April at around $72,000 per coin or 81,279,720 KRW, according to data from Bitcoin.com. However, it went down 13% after Elon Musk, CEO of Tesla Motors, announced that they will stop accepting BTC as payment.

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