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The Korea Institute of Finance has advised South Korea’s Financial Services Commission to classify decentralized finance, or DeFi, and over-the-counter, or OTC, support providers as unlicensed virtual asset operators and restrict domestic users’ access or trading with them, Digital Asset reported.
In a report on second-phase legislation and anti-money laundering, or AML, improvements related to stablecoins submitted to the commission late last year, the institute said AML and counter-terrorist financing, or CFT, obligations need to be applied to DeFi and OTC providers. It also proposed drawing up separate guidelines to determine whether overseas unregistered virtual asset operators fall under enforcement.
On stablecoins, the report presented additional measures for areas where existing AML systems are difficult to apply, including cold wallets and person-to-person wallet transactions. The institute said South Korea also needs to consider, over the medium to long term, imposing reporting and registration requirements on platforms or software providers that support transfers between stablecoin wallets.