The Financial Services Commision (FSC) — a top regulatory body in South Korea — is moving to de-anonymize domestic bank accounts used to trade cryptocurrencies starting January 30th, 2018. Even still, the move is a far cry from the reports of an outright ban that caused waves in the crypto space last week.
Trading … On Our Terms
The new regulation is at odds with the core principle of cryptocurrencies — anonymity. Cryptocurrency traders or investors in South Korea will now be compelled to link their real identities to their bank accounts. Additionally, they will be permitted to trade on exchanges only if their personal identification and bank account correspond to their exchange account.
Regardless of the tightening dyamic, though, traders the world over are regarding the move as a win for the space. FUD (“fear, uncertainty, doubt”) reached fever pitch levels last week as strife within the South Korean government led to anxieties over a potential outright ban of trading.
Now, it’s clear that bitcoin trading won’t be banned at all; instead, just completely anonymous trading.
The cited reason to step up regulatory actions on the crypto space is concerns over potential exploitations by financial criminals. FSC Vice Chair Kim Yong remarked that going forward “cryptocurrency exchanges that are in danger of being exploited for money laundering will be thrown out of the market.”
Moreover, the regulation will also upset foreign nationals who relied on exchanges in South Korea. The FSC highlighted in its announcement that foreign nationals and minors will not be permitted to create accounts at domestic exchanges now.
South Korean Exchanges to Abide Rules for Survival
South Korean crypto exchanges are already in motion to adhere to these new regulations. Korbit, a popular South Korean exchange, mentioned in a new blog post:
“As mentioned above, in order to introduce a real name verification account and to prevent money laundering in accordance with the government policy, the virtual account service currently provided by Cobit will be stopped within this month and the real name confirmation account will be utilized.”
Bithumb — one of the larger exchanges in the nation — said: “We will make efforts to build a more transparent and healthy transaction system with the real-name trading platform.”
Could this de-anonymizing regulatory path be a model for other nations? A global cryptocurrency regulatory framework is expected to be proposed in the upcoming G20 summit in Argentina. South Korea is also a member of the G20 group. We’ll have to see what happens from there.
Is South Korea moving in the right direction or the wrong direction when it comes to crypto regulation? Let us know in the comments below.
Images via Concept News Central, Business Korea