South Korea to Tighten Bitcoin Exchange Rules Amid ‘Speculative’ Boom

The South Korea now bans domestic cryptocurrency exchanges from allowing users to make transactions through anonymous accounts.

Dec 28, 2017 at 3:15 p.m. UTC
Updated Sep 13, 2021 at 7:18 a.m. UTC

The South Korean government announced today it will move to prohibit domestic cryptocurrency exchanges from allowing users to make transactions through anonymous accounts, local news sources report.

As part of what appears to be a series of updates designed to improve oversight of industry practices, the government will also seek to bar banks from issuing new virtual accounts to cryptocurrency exchanges.

According to the South Korean news agency Yonhap, the announcements were made by Hong Nam-ki, the minister of the Office for Government Policy Coordination, after discussion with vice ministers from other governmental bodies regarding the recent rise in cryptocurrency interest and ownership domestically.

Hong’s announcement came just after an hour since the head of South Korea’s financial regulator warned against the bitcoin bubble during a meeting with the press.

"I bet the bubble in bitcoin will burst later," said Choe Heung-sik, the governor of the Financial Supervisory Service (FSS).

Hong told the news source that only accounts with real and matching identity can be allowed for deposit and withdrawals.

The government's ban on using anonymous accounts, effectively a mandate that exchange providers perform know-your-customer (KYC) due diligence, is seen as the latest move to curb the trading activity around cryptocurrencies in the country.

It can also be seen as the result of recent events in which government bodies were reportedly considering measures to halt what they called an "overheating of virtual currency speculation."

According to the report, the Financial Intelligence Unit and the Financial Supervisory Service will implement the regulation and supervise exchanges to abide the new rule.

Image of South Korean Won via CoinDesk archive.

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