South Korea will enforce its ban on anonymous bank accounts used in cryptocurrency trading in a week from now. In conjunction, six domestic banks will issue new trading accounts that follow KYC norms.
According to multiple reports on Tuesday, South Korean regulators have rubberstamped the ban on anonymous cryptocurrency trading through anonymous virtual bank accounts in the country. Strictly speaking, the long-anticipated move will not allow traders to make deposits into their wallets at domestic cryptocurrency exchanges unless their names on their depositing bank accounts matches the account name at cryptocurrency exchanges.
In tandem, at least six South Korean banks will issue new trading accounts for cryptocurrency transactions on January 30. As banks rollout these new accounts with a system that will match names between banking and crypto-exchange accounts, existing anonymous virtual accounts will be banned on the same day, Financial Services Commission (FSC) vice-chairman Kim Yong-beom told reporters today.
The six banks will include NH Bank, the Industrial Bank of Korea and, as reported previously, Shinhan Bank – Korea’s second largest financial institution.
Enforcing the real-name trading system will also mandate cryptocurrency exchanges to share the users’ transaction data with the banks. This move is reportedly a part of the government’s ongoing scrutiny into ‘speculative investments’ by much of Korean society into cryptocurrencies.
While Korea’s Justice Ministry called for an outright ban on cryptocurrency trading and exchanges, other lawmakers and regulators have dismissed the hardline approach. South Korea’s Presidential Office weighed in on the topic, stressing that a sweeping ban was one of several measures being considered for regulating the cryptocurrency sector.
Today’s announcement from the South Korean government further hints at a policy that is unlikely to include that sweeping ban, which will now only extend to non-Korean nationals and anonymous trading.
“Nobody, including the government, guarantees the value of cryptocurrencies,” FSC’s Kim Yong-beom stated today, resorting to cautioning adopters of investments rather than any warning of a ban. “Given its highly volatile nature, please be cautious when making investment decisions.”
The news will come as a relief to cryptocurrency adopters and exchanges alike. According to Yonhap, major Korean exchange Bithumb is welcoming the government’s new policy, with a statement that read:
“We will make efforts to build a more transparent and healthy transaction system with the real-name trading platform.”
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Last modified: March 4, 2021 5:03 PM