Korean Exchange Halts Crypto Trading due to KYC System

Coinpia exchange executives said the company has to halt trading to comply with anti-money laundry and know-your-customer rules
06 February 2018   233

South Korean cryptocurrency exchange Coinpia has announced on Tuesday it will suspend trading and deposits after it was unable to implement a customer identification system in line with a recently enacted government mandate. Exchange executives said the company has to halt trading to comply with anti-money laundry and know-your-customer rules.

According to an announcement, Coinpia had suspended Korean won deposits on Jan. 30 in an effort to comply with the new regulation, enforced by South Korea's watchdog Finance Service Commission.

We have recently reported that South Korea launched a real-name trading system for cryptocurrencies, banning the use of anonymous bank accounts in transactions to prevent cryptocurrency from being used for money laundering and other illegal activities.

Opening cryptocurrency accounts has been banned for weeks while the banks have installed the system, which ensures only real-name bank accounts and matching accounts at cryptocurrency exchanges for deposits and withdrawals. Now each trader must identify himself with the help of a bank account to buy or sell a cryptocurrency.

However, Coinpia said it continues to work on the integration of identity verification into its existing exchange system.

German Financial Regulator Clarifies Stance on ICOs

The Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) has clarified its position on ICOs
22 February 2018   55

German financial regulator admitted it was receiving many inquiries about the status of tokens and cryptocurrencies. According to an advisory letter, BaFin provides some basic definitions of ICOs and related terms. It is important because the results of a new survey showed that more than two-thirds of Germans know about bitcoin.

In this letter, BaFin educates the public and explains how tokens are typically generated, how blockchain works and that ICOs are used to raise funds for startup projects. The note states that for regulatory purposes, ICOs, tokens, coins, and cryptocurrencies are subject to the existing provisions in the field of securities supervision and other relevant national and EU laws.

The authority advises participants in ICOs to check and follow rules applicable to regulated financial instruments, such as securities. If businesses or individuals have any doubts about regulations, they should approach BaFin.

According to BaFin, companies should fulfill any obligations under the Banking Act and the Capital Investment Code, the Insurance Supervision Act and the Payment Services Supervision Act. The transactions may be prohibited if relevant regulatory requirements are not met.

The authority also states that legal classification of tokens requires precise examination. It will determine their status on a case-by-case basis after studying their features. The token should be transferable and tradable on cryptocurrency trading platforms in order to be classified as a security.