Financial Services Commission to Conduct Full Investigation of 'Disguised Hive Accounts' at Cryptocurrency Exchanges by September

2021 1st Related Agencies Council Meeting Held

[Asia Economy Reporter Kim Jin-ho] Financial authorities have decided to conduct a monthly full-scale investigation of disguised accounts and third-party name collection accounts of virtual currency operators across all financial companies until September.

On the 30th, the Financial Services Commission (FSC) announced this at the '2021 1st Related Agencies Council' hosted by the Financial Intelligence Unit (FIU). The meeting was attended by 15 organizations, including the Korea Federation of Banks, Korea Financial Investment Association, Korea Life Insurance Association, Korea Non-Life Insurance Association, Korea Credit Finance Association, National Federation of Fisheries Cooperatives, National Credit Union Federation of Korea, Saemaeul Geumgo, Korea Federation of Savings Banks, Korea Online Investment Association, and Korea Casino Association, which serve as inspection consignment institutions.

The FSC stated that under the Special Financial Transactions Information Act (Special Act on Reporting and Using Specified Financial Transaction Information), virtual currency operators are required to register by September 24, and monitoring of collection accounts is being strengthened. However, incidents of financial companies using third-party name accounts and disguised affiliated company accounts have been occurring.

Accordingly, a full-scale investigation of disguised accounts and third-party name collection accounts of virtual currency operators targeting all financial companies scheduled until the end of June will be conducted monthly until September. Discovered disguised accounts will be dealt with by suspending transactions and sharing information.

Furthermore, the FSC will continuously investigate disguised and third-party accounts in financial companies and establish a risk management system for virtual asset operators across all financial sectors to enable response measures such as transaction suspension. In addition, a hotline will be established with banks to promptly investigate, take action on, and share information about disguised and third-party accounts.

An FSC official said, "We have requested strengthening internal controls as money laundering crimes such as fraudulent loans and embezzlement of investment funds linked to internal employees are increasing," adding, "Financial companies must pay special attention to preventing money laundering and illegal financial transactions in loan, investment, and asset custody operations."

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