The government will launch direct inspections into cryptocurrency exchanges.

Financial Services Commission chairman Choi Jong-ku held a special briefing Monday and said that financial authorities have begun inspections on six local banks related to virtual accounts. The joint inspection is carried out by the Financial Intelligence Unit and the Financial Supervisory Service.

Choi said if the inspections uncover any illegal acts, the virtual accounts will be shut down. He said that authorities will also look into whether the lenders are abiding by their obligations to prevent money laundering. He said that problematic banks will have their virtual account services suspended.

The watchdog chief said that intensive probes will be stepped up against financial institutions handling virtual currencies, and fraudulent activities and manipulation of market prices will also be investigated.

The chairman said whether the institutions not only handle but also own virtual currencies will also be looked into, and strong measures will be enforced against illicit acts even before related laws are revised.