South Korea-based exchanges of cryptocurrency have touched the government-mandated time limit to be compliant with the Travel Rule, however not the entirety of the players in the industry are satisfied with the respective move. From today onwards, the exchanges will be required to flag any transactions of crypto worth up to nearly $821. Transfers above the respective value will be limited to the user-validated wallets as well as some chosen exchanges having adopted the anti-money laundering mechanisms thereof.
The Travel Rule counts to be a group of instructions released on the behalf of the FATF (Financial Action Task Force) developed to assist the authorities in having an eye on digital assets’ movement between VASP (virtual asset service providers) like the crypto exchanges as well as the issuers of digital assets. A source linked to a native centralized crypto exchange appreciated the step ahead for the crypto industry of the country.
In addition to this, the source pointed out that the respective industry is presently moving towards the organizational-scale adoption of crypto and will make significant attempts for a broad-level acceptance. A problem may be experienced by the crypto traders within South Korea, who added more than $45.8B in the value of the crypto market during the previous year, for determining the exchanges from and to which they can transact their funds.
Among the prominent four exchanges (Korbit, Coinone, Bithumb, and Upbit), there are a couple of Travel Rule structures. There is a minute difference between these systems and for both of them, there is a requirement for compliance with the instructions. If the respective instructions are not complied with, no transactions would be permitted. As per Simon Kim – the CEO of Hashed (a crypto VC based in South Korea) – these disparities can probably create frustration as well as confusion among the local traders.
He is of the view that the crypto community of the country witnesses the directive as undoubtedly over-regulation. He stressed that this is a state where no adequate infrastructure or regulatory organization has been established due to a lower level of understanding for moving ahead. It is anticipated that the modifications will be made as the community is criticizing it to be made appropriate.
In the meantime, Coinone, Korbit, and Bithumb all have embraced the CODE system. Due to this, transactions between Binance, FTX, Bitfront, Line bitmax, Bitbank, Phemex, Coinist Pro, Gemini, Bybit, BitFlyer, Coincheck, Kraken, and Coinbase are permitted.
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