Anonymous Cryptocurrency Trading to be Banned from Jan 30 in South Korea
The South Korean government and its regulatory bodies have been initiating several measures in order to control the frenzy for cryptocurrency investing within its investors. Since the beginning of this month, there have been several announcements coming from South Korea to introduce regulatory measures on cryptocurrency trading.
In one such step, the Korean government earlier announced to ban crypto trading through virtual and anonymous accounts in order to prevent and track illicit activities of tax evasion and money laundering. As a result the Korean government also asked its local exchanges and users to link their official banks with actual names to their trading accounts registered on the exchanges.
In a further pus to implement this decision, the Financial Services Commission (FSC) of South Korea has set a deadline. The FSC has said that starting from Jan 30 this month, if crypto investors want to continue trading, they will have to use real-name bank accounts.
After Jan 30, only those investors whose bank account name matches to their registered accounts on their exchanges will be able to deposit funds in order to trade into cryptocurrencies. In order to curb the cryptocurrency speculation, the financial regulator aims to strengthen "know-your-customer" (KYC) compliance.
In addition to setting up the deadline, the official announcement has also established guidelines to crypto exchanges for anti-money laundering. The guidelines highlight different situations to which the exchanges are required to stay alert for the possibility of any illicit activities.
The statement reads: “Specifically, for users to make virtual currency transactions more than 10 million won per day or more than 20 million won for 7 days when depositing and withdrawing funds, this is the type of financial transaction you suspect for money laundering.”
After this regulatory move from the Korean officials, foreign officials are facing some seriously tough time to use South Korean cryptocurrency exchanges through virtual accounts. The FSC statement says that minors and non-citizens will be restricted from the new service of name verification.
After this measure, several cryptocurrency card companies are also reportedly blocking payments to foreign cryptocurrency exchanges. As reported by Business Korea, two companies - Shinhan card and Lotte card have started blocking debit and credit card transactions with 20 foreign cryptocurrency exchanges. Another company Bookman card is also planning a similar measure this week ahead.
The Credit Finance Association, while commenting on this matter said: “Currently, only 20 major digital currency exchanges are blocked but we will confirm and share information about exchanges grasped by individual card issuers. An increasing number of exchanges will be continuously blocked in the future. There are about 7000 cryptocurrency exchanges around the world.”