One of the key provisions adopted by the Korea Banking Federation was the introduction of an equity-to-customer deposit matching requirement for cryptocurrency exchanges providing services in South Korea. Virtual asset exchanges must maintain reserves of at least 3 billion won (about $2.3 million) on their balance sheets to be responsible for any potential damage their users may suffer.
The maximum amount of the reserve is up to 30 percent of the average daily amount of deposits made to the virtual asset operator’s account during the previous year, with a maximum limit of up to 20 billion won (about $15.7 million).
Another innovation was the division of user accounts into two types: limit accounts and regular accounts. Each will have specific authorizations and restrictions necessary to effectively manage deposit and withdrawal transactions.
The Korea Banking Federation has notified the crypto community that financial institutions will be required to conduct annual enhanced customer identification procedures. The enhanced due diligence (EDD) process will include not only verification of user identification information, but also verification of additional information such as the purpose of the transaction and the source of funds.
Earlier, South Korean authorities announced the creation of a new inter-agency unit to combat cryptocurrency crime and fraud.