South Korean Tax Authority Forms Group with Cryptocurrency Exchanges to Prevent Illegal Foreign Transactions

The Korea Customs Service, along with five major cryptocurrency exchanges, have collaborated to establish a group aimed at preventing illegal transactions.

South Korea’s Tax Authority, DAXA, has formed a committee to prevent illegal transactions, according to a report.

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South Korea’s tax Authority, the Korea Customs Service group, and five major cryptocurrency exchanges including Bithumb Korea, Coinone, Korbit, and Streami have joined forces to prevent illegal foreign transactions, according to a report by News1.KR.

The newly formed group, called the Digital Asset Exchange Association (DAXA), consists of the five most prominent cryptocurrency exchanges in South Korea. DAXA will play an advisory role in the newly established committee.

DAXA is the industry’s most important self-regulating body in South Korea, with its members being the only exchanges in the country with the necessary operating permits to offer fiat-won trading.

Korea Customs Service, founded in 1970, operates under the Ministry of Economy and Finance and is headquartered in Seo District, Daejeon, South Korea.

The committee will address any action related to illegal foreign exchange transactions involving cryptocurrencies. Additionally, it will explore ways to collaborate with regulators and organizations within South Korea, while also seeking feedback on concerns and opinions regarding such transactions.

FSC Clamps Down on Money Laundering

South Korea’s Financial Services Commission recently announced plans to crack down on the illegal outflow of funds overseas. To prevent money laundering, the commission intends to ban the use of credit cards to purchase cryptocurrencies.

In December, DAXA made an announcement about its partnership with financial regulators to identify and take action against “undeclared crypto operators.”

South Korea continues to dominate headlines in the cryptocurrency world. Just hours before New Year’s Eve, Orbit Bridge, the main bridge for the Claytont ecosystem, was exploited for nearly $82 million. Multiple South Korean agencies are currently investigating this multi-million dollar hack.

Furthermore, allegations have surfaced pointing to North Korea’s hacking group, ‘Lazarus,’ as the orchestrator of this exploit. The South Korean National Intelligence Service (NIS) has intervened for a comprehensive investigation.

Q&A Section

Q: Why is it important for South Korea to prevent illegal foreign transactions involving cryptocurrencies?

A: South Korea, like many other countries, is concerned about money laundering and the illegal outflow of funds overseas. By preventing these transactions, the country aims to maintain financial stability and protect the integrity of its financial systems.

Q: How will the newly formed committee work with regulators and organizations in South Korea?

A: The committee will seek ways to collaborate with regulators and organizations in South Korea to ensure a coordinated effort in preventing illegal foreign transactions. This collaboration is essential to effectively address the issue and implement necessary measures.

Q: What impact will the ban on credit card purchases of cryptocurrencies have on money laundering?

A: The ban on using credit cards to purchase cryptocurrencies will make it more difficult for individuals to anonymously transfer funds and engage in money laundering activities. It is a preventive measure to curb the flow of illegal funds through cryptocurrencies.

Future Outlook and Insights

The formation of the group between the tax authority and cryptocurrency exchanges is a positive step towards addressing the issue of illegal foreign transactions involving cryptocurrencies. By establishing a dedicated committee for this purpose, South Korea aims to enhance its regulation and oversight of the digital asset industry.

The crackdown on money laundering and undeclared crypto operators is a direct response to the ongoing challenges faced by the cryptocurrency industry. As governments worldwide strengthen their regulations, it becomes increasingly important for exchanges and market participants to comply with legal requirements and adhere to best practices.

Looking ahead, it is crucial for South Korea to continue collaborating with international bodies and sharing information to effectively combat illegal activities in the cryptocurrency space. Enhanced cybersecurity measures, strict identification protocols, and ongoing education and awareness initiatives can help create a safer environment for cryptocurrency transactions.

With the development of regulatory frameworks and the increasing integration of cryptocurrencies into the mainstream financial system, South Korea has the opportunity to position itself as a global leader in the digital asset industry. By fostering innovation while maintaining a secure environment, the country can attract investment and contribute to the growth of the blockchain ecosystem.

References

  1. News1.KR
  2. South Korea’s Financial Services Commission Announcement
  3. DAXA Announcement
  4. Clayton Hack Exploitation
  5. CoinsPaid Security Breach in South Korea

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