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   252

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.

Korean Banks to Limit the Service of Unverified Traders

In January, Korean authorities tightened the rules for crypto trading on local exchanges, requiring platform users to identify their ID with a bank account
12 September 2018   281

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.