South Korea Looks to Ban Crypto Exchange Employees From Trading on Their Own Platforms

Thursday 10 June 2021, 3:17 AM AEST - 6 days ago

South Korea is tightening restrictions on exchange employees.

The Korea Financial Services Commission (FSC) will impose a fine of 100 million won (around $89,844) on exchange employees caught trading on the platforms they work for. As of now, there are no laws that prohibit executives and employees of exchanges from trading crypto on their own platforms.

According to the FSC, officials from the Korea Financial Intelligence Unit (FIU), which operates under the FSC, met with the heads of Koreas major crypto exchanges on June 3 to inform them of the updated decree.

South Koreas updated Financial Transactions Reports Act (FTRA) requires all crypto exchanges to register with the FIU by Sept. 24, 2021. Registration isnt a simple filing process however. Exchanges must meet stringent conditions to have their registration approved. These conditions include acquiring partnerships with commercial banks and having their anti-money laundering (AML) and know-your-customer (KYC) systems approved.

Any exchanges that arent approved by the deadline will be shut down. The FIU has also stated that registered exchanges whose executives or employees are caught trading on their own platforms after the September deadline will have their registration status revoked.

Koreas major exchanges have actually established company policies that restrict employee trading, but many of them will be rendered mute by the FIUs new restrictions.

Upbit, one of the worlds largest exchanges by volume, currently allows employees to trade on its own platform, but theyre prohibited from touching any cryptocurrency thats not bitcoin (BTC, +13.42%) (BTC), ether (ETH, +7.87%) (ETH) or tether (USDT, -0.02%) (USDT). All company employees are prohibited from purchasing or trading anything beyond these three cryptocurrencies, regardless of which platform they use.

Additionally, Upbit employees are required to report how much crypto they own and how much they profit from each trade. There is also an annual limit on how much they can trade, but this limit has not been publicized.

Bithumb, another major South Korean player, allows employees to purchase and trade new cryptocurrencies only with ...

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