Despite the fact that virtual asset transactions are highly anonymous, and so pose threats of money laundering and financing of terrorism, there are currently no legal or systematic devices in place to prevent such threats. At the same time, international organizations such as the Group of 20 (G20) and the Financial Action Task Force (FATF) have established international standards for prevention of money laundering and financing of terrorism, and are demanding that member countries comply with such standards. Therefore, this proposal aims to impose an obligation to effectively prevent money laundering and financing of terrorism with respect to a business place handling a virtual asset, and prescribe matters to be complied with by a financial company when acting as a business place handling a virtual asset and when performing a financial transaction.

Details

A. Define virtual asset, and define a business place handling a virtual asset as a person who conducts virtual asset-related transactions as a business (Article 2 (1), (2) and (3))

B. Prescribe that a financial company, etc., when entering into a financial transaction with a business place handling a virtual asset, shall perform additional due diligence regarding whether such business place handling a virtual asset has performed its reporting duty, etc., and when it has been discovered that such business place handing a virtual asset has failed to perform its reporting duty, etc., shall refuse to enter into a financial transaction (Article 5-2 (4))

C. Require that, for a business place handling a virtual asset, its trade name and name of its representative, etc. shall be reported to the head of the Korea Financial Intelligence Unit, and newly insert a penalty provision to be applied when a business place handling a virtual asset operates without making such a report (Article 7, Article 17, and Article 19)

D. Prescribe matters that enable a business place handling a virtual asset to report a transaction of a suspected illegal asset or a large cash transaction, etc., such as separately recording and managing each customer’s transaction history. (Article 8)

Reporting, etc., on Transactions of Suspected Illegal Assets, etc. (Article 4), Reporting of Large Cash Transactions by Financial Companies, etc. (Article 4-2), Customer Due Diligence for Financial Companies, etc. (Article 5-2), Scope of Application (Article 6), Reporting of Business Places Handling Virtual Assets (Article 7), Measures by Business Places Handling Virtual Assets (Article 8).