The Bank of Korea (BOK) is concerned about the volatility of cryptocurrency and a potential threat to the financial system. Korea’s central bank is taking the initiative to inspect every cryptocurrency transaction made through the client’s bank accounts. Since the Bank of Korea is legally authorized, it is requesting materials and records from financial firms as it is considered imperative since there is a big probability of illegal transactions.

South Korea’s authorities have been closely monitoring crypto activities in the area. Financial Sevices Commission and Financial Intelligence Unit have also been tracing any illegal activities connected to cryptocurrencies or digital assets. In addition, all crypto trading platforms are obliged to provide transaction receipts to the National Tax Service beginning of next year.

Apart from this, the main plan of the Central Bank is to strengthen the crypto regulation by monitoring the volume of cryptocurrencies from real-name bank accounts. According to the officials of the bank, the central bank’s crypto monitoring system can start in September if approved by lawmakers.

The registration as a virtual asset service provider (VASP) cutoff date will be on September 24. This registration is a requirement that will help BOK decide on the legality of users and their transactions.

Despite the strengthening of crypto regulations, this plan will have a huge influence on the development of the crypto space in the country. Industry specialists are giving it a couple of more months to see the impact on small local crypto exchanges, as this requirement is hard to comply with.