South Korean authorities have now put in place a new account verification system that ends anonymous cryptocurrency trading. The new system requires that traders must use their real names to open accounts in banks where their exchanges also have accounts.
The South Korean government has already started pairing virtual cryptocurrency accounts with their real owners. A South Korean news channel called Yonhap reports that the implementation of this new account system effectively ends “the use of anonymous bank accounts in digital currency transactions so as to prevent virtual currencies from being used for money laundering and other illegal activities.”
A total of six banks have already adopted the new system so far, namely Shinhan bank, Nonghyup Back, Industrial bank of Korea, Kookmin bank, Hana bank, and Gwangju bank. The news outlet reports that the government is halting the opening of cryptocurrency accounts for the next four weeks so banks can upgrade their computer systems. The government says such a freeze in opening new accounts is necessary to ensure that accounts bear only the real names of individuals opening them.
South Korean media is also reporting that the new system also bars foreigners and underage investors from opening cryptocurrency accounts. The system also requires cryptocurrency exchanges to share user transaction data with banks.” If traders still using virtual accounts keep depositing money into their accounts, they will be fined.” A news report noted.
A media group called Maekyung had estimated that customers will be rushing to open bank accounts. However, Maekyung later reported that banks have noticed small changes in the number of new account openings.
An Industrial Bank of Korea official told the news outlet that there has not been any big difference in the number of customers opening accounts with the bank.
A reporter from Chosun IIbo paid a visit to several banks and he found no unusual traffic. When he got to a branch of Shinhan Bank, there was a customer guide indicating the definitions of crypto-related terms. It also included an anti-money laundering guideline.