South Korean banks will limit the service for users of crypto exchanges that have not identified their identity at the request of financial regulators of the country. This is reported by Bitcoin.com with reference to local media.
In January, South Korean authorities tightened the rules for trading cryptocurrencies on local exchanges, requiring platform users to identify their identity with a bank account.
To do this, a trader must open an account with a bank that cooperates with the exchange within the framework of the so-called real-name system. If the requirement is not met, traders can only withdraw funds from their accounts and lose the opportunity to deposit Korean won on their accounts.
However, after more than seven months, only four major cryptoexchangee platforms of the country - Upbit, Bithumb, Coinone and Korbit - offered their clients services for converting accounts into verified accounts.
At the moment about 40-50% of users of these exchanges fulfilled the January demand of the authorities. In addition, most traders continue to conduct operations with crypto-currencies at the expense of funds deposited on exchanges before tightening the rules of trade.
In turn, some exchanges have taken a number of measures to encourage the transition of traders to verified accounts. In particular, Bithumb cut its daily withdrawal limit by 10% for users with unconfirmed accounts, and Upbit distributed about 100 million Korean won ($ 88,000) to traders who fulfilled the requirements in August.
So far, banks cooperate only with four exchanges of the country. For example, Bithumb has an agreement with Nonghyup Bank. Recently, financial institutions have promised to strengthen measures to combat unverified users of exchanges. There's no info whether this decision will affect mining farms of South Korea.
As local publications write, banks plan to limit service and impose restrictions on the entry and withdrawal of funds in Korean won, unless traders create new verified accounts by a certain date.