S. Korea starts real-name trading system for cryptocurrencies

30일부터 암호화폐 거래실명제 실시

Anyone trading cryptocurrencies in South Korea can only use real-name bank accounts from now on.
Part of the government's measures to prevent virtual currency being used for illegal activities like money laundering and tax evasion.
Lee Jeong-yeon zooms in on the change and its potential impact.
Some 3-million cryptocurrency users in South Korea will no longer be able to make transactions anonymously.
Until now, currency exchanges issued encrypted, so-called virtual accounts for crypto exchanges. But now, those virtual accounts are gone. Instead, investors will make transactions directly to and from designated real-name bank accounts. These personal accounts will have to be at the same bank their exchange uses, meaning some people will have to switch banks or create new accounts.
There are currently six banks working with the exchanges. Bithumb, the largest exchange, is working with Shinhan and NongHyup. Upbit is working with IBK, Coinone with Nonghyup, and Korbit with Shinhan.
To get on board with the new rules, investors both existing and new... will have to prove to their exchange that the bank account they're using is their own.
There's been concern that the changes could cause a lot of confusion.
Those opening new bank accounts should know... that they need to show the bank that their new account won't be used only for crypto trading, which isn't considered a valid reason for opening one. They'll need ID and proof of employment.. or a regular bill they pay. Without that proof, accounts will come with noticeable limitations.
This also prevents minors and people without jobs from opening new accounts.
For several weeks, Korea had banned crypto exchanges from opening new trading accounts,... and it had been thought that lifting the ban would bring a flood of new crypto traders. But that hasn't been the case.

"There are more hurdles to creating new accounts now so this has decreased demand. Also, banks are more careful in issuing new accounts because what they could lose from any problems that occur far outweigh the gain, which is mere service fees."

Experts say the volatile cryptocurrency market won’t stabilize any time soon, even with the real name system, and we can still expect further government regulations to affect cryptocurrency prices.

Lee Jeong-yeon, Arirang News

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