Limited Allowance for Sharing Cryptocurrency Order Books

There is a need to allow limited sharing of order books in the cryptocurrency market. According to a report submitted by the Korea Financial Institute to the Financial Services Commission at the end of last year, sharing order books involves sharing quotes between exchanges, which is generally prohibited under the Specific Financial Information Act but can be allowed if certain conditions are met. The Financial Institute stated that since order book sharing is considered part of the exchange's business model, it should be allowed under strict conditions, based on the implementation of Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) regulations. However, it should also be noted that sharing order books can transfer AML risks between different operators, and the disconnection of information may hinder the smooth implementation of existing AML systems. In particular, when sharing order books with overseas exchanges, preventive measures regarding the implementation of Customer Due Diligence (CDD) and screening obligations for sanctioned entities are necessary. This issue became controversial last September when Bithumb announced that it would share its order book with an Australian exchange upon launching its USDT market, leading to a fine imposed by the Personal Information Protection Commission on Bithumb.

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