South Korea’s Financial Intelligence Unit (FIU) extends its comprehensive anti-money laundering and compliance inspection into crypto exchange Bithumb for two more days. The South Korean regulators have maintained a strict stance against crypto exchanges after the collapse of Terra Classic (LUNC) in May. The FIU has already completed inspections and audits of Upbit, Gopax, and Coinone.
Bithumb Under Inspection by South Korea’s Financial Intelligence Unit
South Korea’s 2nd largest crypto exchange Bithumb is under inspection by the Financial Services Commission’s Financial Intelligence Unit for compliance with the anti-money laundering law Specific Financial Information Act, reported local media on September 20. The inspection and audit of Bithumb was expected to be completed by September 19. However, the delay in submitting the data by Bithumb led to an extension for 2 more days.
Moreover, crypto exchange FTX’s interest to acquire Bithumb will compel the FIU to audit the background or governance structure. In fact, Bithumb’s largest shareholder Vident has agreed with FTX to dispose of its stake in the crypto exchange. Also, former Bithumb’s Chairman Lee Jung-hoon is under trial for fraud under the Specific Economic Law. These are also some of the reasons behind the extension of inspection.
The FIU will inspect the implementation of improvements suggested in the previous review. Also, the crypto exchanges undergo a thorough audit of anti-money laundering compliance by the firms.
Last month, the FIU completed the inspection of Upbit, Gopax, and Coinone. If there is a violation of anti-money laundering law, fines are imposed on the crypto exchanges. However, the results of the inspection and audit are reported privately to companies.
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South Korean regulators have increased oversight of crypto exchanges after the Terra Classic (LUNC) crisis and the rise in money laundering.
Crypto-Related Money Laundering
Money laundering, fraud, and tax evasion have grown substantially in South Korea in recent years. Interestingly, the regulators have uncovered $3.4 billion in crypto-linked illegal foreign-exchange transactions.
Moreover, South Korea’s Prosecutor’s Office is investigating four crypto-related cases involving over $1.1 billion in illegal foreign-exchange transactions. Terra founder Do Kwon is also accused of money laundering through shell companies. Prosecutors have issued an arrest warrant against Do Kwon and started the process to place him on Interpol’s Red Notice.
Meanwhile, the Terra Classic (LUNC) price continues to dive below. It is trading near the $0.0003 level, down 6% in the last 24 hours.