Bithumb Exchange and Chainalysis collaborate to enforce new regulation in South Korea

South Korean cryptocurrency exchange Bithumb announced a collaboration with analytics firm Chainalysis toCompliance with the new regulation adopted in South Korea this month.

As Bithumb states, the exchange will useChainalysis’s Reactor tool to check for suspicious activity on its platform in order to comply with the recently adopted amendments to the Law on reporting and use of specific financial information of South Korea.

In accordance with the new regulation, exchangescryptocurrencies should begin to comply with the new rules by September 2021. By this time, the law will enter into force and the six-month grace period will end, which is given to exchanges to make changes to their work.

Head of Bithumb Regulatory Affairs, Sungmi Lee, predicts that lawmakers will further strengthen the regulation of the cryptocurrency industry in the near future:

“We look forward to further legislative updates following the adoption of regulation last week.”

Under the new law, exchanges should report ontheir operations to the country's financial intelligence unit and open bank accounts confirmed by identification data. In case of non-compliance with the rules, exchange managers can be fined $ 42,000 and sentenced to imprisonment for up to 5 years.

Exchanges must also certify their systems.security at the Korea Internet Security Agency (KISA). Due to the complexity of this process, so far only four sites have managed to do this: Bithumb, Upbit, Coinwon and Korbit. Chainalysis profit director Jason Bonds noted:

“As the popularity of cryptocurrencies in South Korea continues to grow, the new rules make Chainalysis solutions for blockchain analysis vital for working in accordance with the law.”

Recall that in December, the Bitfinex exchange introduced the Chainalysis solution for tracking transactions, and in September the Bittrex exchange added a similar tool.

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