Digital currency exchange Huobi has secured the backing of regulators in South Korea, following the decision to award Huobi Korea an ISMS certification.
Houbi Korea is considered to be the second largest digital currency exchange by transaction volumes in the world, and the decision means the South Korean arm of Huobi now complies with the Special Payments Act, which is set to come into force in Korea in March 2021.
The Korea Internet and Security Agency (KISA) granted the information security management system (ISMS) certification after Huobi satisfied the compliance criteria under the new act, which includes measures for anti-money laundering and Know-Your-Customer protocols.
Authorities in Korea and elsewhere are introducing new measures designed to prevent illegal use of digital currency, including rules designed to minimize money laundering, fraud and other financial crimes.
Part of the new measures set to come into force in March include a requirement for exchanges to report the real names of their customers to the Korean Financial Intelligence Unit, which must also be verified against other personal data, including resident registration numbers, for validity.
According to Park Si-deok, CEO of Huobi Korea, the certification gives the exchange a stronger basis for providing crypto services to institutional clients.
The move comes against a challenging backdrop for operators in South Korea in recent months. Despite the strong moves from Huobi Korea, Binance KR recently announced it was shutting operations in the country, following low trading volumes through the exchange.
The new ISMS certification and the Special Payments Act are set to introduce new compliance issues for exchange and other digital currency operators in the country, which require regulatory approval and licensing as a condition of trading in the country.
The certification for Huobi Korea is expected to cement the firm’s position as one of Korea’s leading options for digital currency exchange.