Bithumb at The Center Of Major Cryptocurrency Exchange Investigation By Authorities In South Korea

South Korean cryptocurrency exchange Bithumb is the primary target in a probe launched by Financial Services Commission (FSC)  in South Korea over the regulation of cryptocurrency assets. The FSC has been investigating cryptocurrency exchanges that are based in the country over how they run their operations but it has recently teamed up with prosecutors to expand their investigations. Kim Yong-beom, the Chairman of the FSC had this to about the probe.

“Following a request by the Financial Supervisory Service (FSS) and the prosecution to address growing anti-money laundering compliance concerns and possible abuse of cryptocurrencies in money laundering and fraud, the FSC is looking into exchanges’ corporate accounts opened in local banks.”

Yong-beom also stated that the investigations will mainly focus on Bithumb as the major focus of the expanded probe although he did not reveal the reasons behind it. Although it is based in South Korea, Bitmain runs its operations on a global scale and it is one of the top cryptocurrency exchanges based on trading volume.

Yong-beom pointed out that the FSC is aware of the disruptive nature of blockchain technology, especially in the banking industry. He, therefore, believes that it is important to work towards the most effective regulation that can be achieved. The FSC official also believes that it is important for regulators from different countries to come together in order to create the right set of regulations that will benefit the entire blockchain and cryptocurrency market.

Yoon Suk-huen, the head of the Financial Supervisory Service (FSS) in South Korea state that the investigation should not pose any threat to the cryptocurrency market. He believes that the investigation might even result in softer cryptocurrency trading regulations as well as better regulations for blockchain projects.

The FSS plays the role of examining and supervising financial institutions while the FSC’s role is to control and regulate financial policies. The two regulatory authorities plan on working together so that they can streamline crypto businesses with the main goal being the eradication of money laundering or fraud.

It was initially thought that the two South Korean authorities had different agendas but the officials handling the investigations have clarified that they have a common objective. The clarification is important to avoid panic in the market. For example, the announcement that crypto exchange UpBit was being investigated on Friday led to panic by investors who instinctively started selling. This panic slashed Bitcoin’s (BTC) market cap by $11 billion and also affected other cryptocurrencies.