South Korea to Restrict Virtual Crypto Accounts
Reports indicate that clients who do not make the switch will be unable to deposit or withdraw from November.
Clients Encouraged to Convert to Real-Name Accounts
South Korea is moving ahead by introducing new regulations in cryptocurrency transactions. Media reports indicate that banks in the Asian country are set to start limiting transaction for clients not using real names in the system. The regulation comes after seven months when authorities rolled out the crypto real-name platform. At the moment, it is estimated that about 50% of accounts on major exchanges have the real name.
Traders who are yet to change their names will not be able to deposit or withdraw money from their accounts. The government’s overall plan is for all exchanges to have real names in their systems. At the moment, only four major exchanges in Korea have managed to provide conversion to clients.
Before converting a virtual account, a user must, first of all, have a bank account with a real name with the trading platform. To date, Korean banks have been offering the service but only limited to the country top four trading platforms. With this new system, when customers deposit funds at any cryptocurrency exchange, the data is linked with bank details.
Media reports further indicate that customers who fail to change to real name accounts but instead invest with money already deposited at the cryptocurrency exchange platform.
A banking sector insider highlighted some of the risks that come with operating virtual accounts. He noted that such customers may become victims of money laundering. They further revealed that major banks are in the process of rolling out measures to increase the conversion rate.
At the moment, banks are urging exchanges whose clients are still operating on virtual accounts to urge them to make a switch immediately. The banks hold the argument that quick conversion rate will increase transparency in all virtual money transaction and curb criminal activities related to cryptocurrencies.
An official from the banks stated that if the switch is not done soon, then further actions will be put in place. He noted that restrictions will be implemented. Media reports indicate that the restriction will be put in place by November.
To meet this goal, major exchanges are coming up with ways of encouraging more conversion. At Bithumb, the withdrawal limit has been limited by at least 10% for accounts yet to be converted. The platform plans to introduce strict rules for clients who won't have real name accounts.
Upbit exchange, on the other hand, has been pushing clients to make the switch soon. The platform hosted a forum where 100 million won was issued to 100 users who changed their account at a specific timeframe.