Korean Regulators to Inspect GDAC Exchange for Anti-Money Laundering Compliance

03/02/2023 07:12 • Tech Ticker • 130 views

On March 2, the Financial Intelligence Unit (FIU) under the Korea Financial Services Commission (KFSC) will start on-site inspection of the GDAC of the country’s currency market exchange on March 6, mainly for the establishment and operation of the anti-money laundering (AML) system. This is the first time that the financial authorities have conducted a detailed inspection of the currency market exchanges through on-site inspection. GDAC Exchange received the notice from the regulatory authority on on-site inspection on February 23.

Korea’s financial intelligence department will conduct on-site inspection on GDAC of the exchange on March 6

Interpret the above information:

The Korean Financial Services Commission’s Financial Intelligence Unit (FIU) has announced plans to conduct an on-site inspection of GDAC, the country’s currency market exchange. The inspection will focus on GDAC’s establishment and implementation of an anti-money laundering (AML) system. This marks the first time financial regulators in Korea have carried out such a detailed inspection of a currency market exchange on-site.

The GDAC Exchange received official notice from the regulatory authority about the planned inspection on February 23rd. The inspection is scheduled to start on March 2nd and will continue until March 6th.

The FIU is responsible for preventing money laundering and terrorist financing through the establishment and operation of AML systems in Korea. In recent years, financial regulators have become increasingly focused on cryptocurrency exchanges due to the potential for digital currencies to be used for illicit activities, such as money laundering, bribery, and tax evasion.

GDAC Exchange is one of the country’s most prominent cryptocurrency exchanges. The exchange has a wide range of cryptocurrencies available for trading, including Bitcoin, Ethereum, and Ripple. The exchange also offers a mobile app and a user-friendly interface, making it popular among cryptocurrency traders in Korea.

The inspection of GDAC comes as part of a wider effort by financial regulators in Korea to clamp down on illegal activities in the cryptocurrency market. In January 2021, the Korean Financial Supervisory Service (FSS) issued guidelines to cryptocurrency exchanges, requiring them to report any suspicious activity related to cryptocurrencies.

The FSS also stated that it would carry out regular inspections of cryptocurrency exchanges to ensure compliance with AML regulations. The inspection of GDAC is likely one of many such inspections that the regulatory authority will carry out in the coming months.

In conclusion, the Korean Financial Services Commission’s on-site inspection of GDAC illustrates the regulator’s commitment to stamping out money laundering and other illicit activities in the cryptocurrency market. While a successful inspection could improve GDAC’s reputation as a compliant exchange, any failure to meet AML standards could result in significant penalties and possibly even lead to the exchange’s closure.

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