The top-three crypto exchanges of South Korea, which include Bithumb, Coinone and Korbit, have come together to co-develop the “travel rule” solution system, announced the companies on Tuesday.
As per the report, all three companies have put in the capital amount of 300 million won ($258,115) to start a joint venture called COnnect Digital Exchanges (CODE). The aim of this venture would be to comply with the mandates implemented by the government and international money-laundering body, before the deadline.
The Financial Action Task Force (FATF), an international anti-money laundering watchdog, imposed the travel rule on the crypto exchanges and digital wallet providers around the world.
This is now, reflected in the virtual asset law of Korea, which officially is called the Act on Reporting and Using Specified Financial Transactions Information. Under this act, all the virtual asset service providers in the country are required to formulate the travel rule by March 25, 2022.
Although the official deadline to comply with the rule is seven months away, the crypto exchanges in the country have started facing problems, as they are being pressurized by the local banks to do so.
As per the announcement, it has been decided that for two years Myung-hoon, the CEO of Coinone, would govern the new joint venture.
It was reported earlier that four crypto exchanges including Upbit, were joining the force to create a travel rule system. However, in July Upbit left the group, claiming its involvement in the venture could be seen as market collusion.