Korean Exchanges to Ban Withdrawal for Unverified Users

This decision was made by Bithumb and Coinone for anti-money laundering policy implementation
18 September 2018   547

Bithumb and Coinone will deprive unverified users of the possibility to withdraw funds, Bitcoin.com reports.

The possibility of withdrawing the crypto currencies to Bithumb will be discontinued on October 1 for corporate market participants. For individual users, this restriction will take effect on October 15. According to the representatives of the exchange, the decision was made to implement the requirements of the anti-money laundering policy.

Representatives of the trading platform stressed that the limitation concerns only the possibility of issuing fiat funds.

The South Korean authorities ordered local crypto-exchanges to verify users in January. Exchange customers can use the so-called "real name system" to convert their accounts into verified and linked to the accounts of banks cooperating with platforms.

However, by now banks have provided this service only to the four largest South Korean exchanges - Bithumb, Upbit, Coinone and Korbit. Moreover, despite the efforts of the government, banks and the cryptoexchanges themselves, only 40-50% of traders took advantage of this service. At the same time, local banks exert pressure on the exchanges, so that the latter more actively comply with the requirements of the anti-money laundering policy.

A similar statement was made by the Coinone Exchange, all unverified users of which will not be able to withdraw Fiat after October 15.

Bithumb to Win Court Case of User’s $355K Hack

The court also noted that cryptocurrencies are "mainly used as speculative means, so it cannot be regarded as an electronic means of payment."
27 December 2018   299

The South Korean court ruled in favor of the Bithumb exchange in a case of theft of a cryptocurrency worth $ 355,000 from its client. The court concluded that the platform has taken all necessary precautions, reports CoinDesk.

In November, an exchange customer placed 478 million Korean won on his account. After that, the hacker allegedly gained access to his account and exchanged fiat currency for Ethereum. Bithumb processed these transactions and as a result, the client’s account left 11 cents in cryptocurrency and one dollar in Fiat.

The affected client of the exchange suggested that the consequences of a hacker attack on the platform in 2017 could result in loss of fund.

Considering that Bithumb offers similar services to the financial sector, it requires a high degree of security measures required by financial institutions.

User's Lawsuit

Representatives of the exchange, in turn, said that Bithumb is not a financial institution and is not obliged to compensate for the damage.

According to the Electronic Financial Transactions Act, Bithumb is not responsible for compensation because it is not a financial company, an electronic financier, or an electronic financial assistant. … Since we have strengthened our security policy since the leak of personal information, we have fulfilled our obligation to be a diligent manager.

Bithumb's Reply

The decision of the court says that Bithumb sent 10 SMS-notifications about the withdrawal of funds from client's account, thereby warning about the danger. The judge ruled out the connection of last year’s Bithumb hacking with the leakage of client data, adding that the victim himself could transfer personal information to the attackers.

The court also noted that cryptocurrencies are "mainly used as speculative means, so it cannot be regarded as an electronic means of payment."

In December, Bithumb commented on new allegations of overstated trading volumes.