Bithumb Exchange Bans Trading Services For North Korea & Iran Users
Bithumb is the biggest cryptocurrency platform available to traders within South Korea, followed only by UPbit. However, in a recent turn of events, they have decided to ban crypto trading on their platform from a total of 11 countries, which include North Korea, Iran, Iraq, and Sri Lanka. They were evaluated by Non-Cooperative Countries and Territories (NCCT) Initiative and found to be high-risk jurisdictions for the platform.
This ban on the listed countries began on May 28th. The creators of the platform said that their main goal was to prevent their infrastructure from being the target of money laundering and other criminal activity. With these priorities in mind, the company issued the ban, which will be watched by the Initiative to ensure that none of these concerns become a reality. For any existing users on the platform that are tied to the 11 banned countries, they have until June 21st to decide what they are going to do with their funds before their accounts are disabled.
Attention from the Government
The locations that are included in under the Non-Cooperative Countries and Territories umbrella include areas that don’t have the right policies and bylaws in place to restrict and stop money laundering. These regions are specifically targeted by the Financial Action Task Force on Money Laundering (FATF) to ensure that the countries don’t negatively impact other economies with their poor business monitoring. By restricting users in their under-regulated economies, there’s a lessened risk of conflict with the local financial rule-makers and consumers can feel more secure about their own trading.
To further protect consumers from these challenges, Bithumb has also decided to have user enable a mobile verification process, which keeps the securities at their fingertips. When someone logs on to their account, they will have to use their smartphone to validate the login, which is much more protective than asking the user to verify personal information.
What is the "Verification Process" and how can it be upgraded? 🧐
— Bithumb (@BithumbOfficial) May 18, 2018
A spokesperson for Bithumb said,
“The Bithumb team will voluntarily impose strict policies and cooperate closely with local financial authorities to increase transparency in the cryptocurrency market and protect investors. With progressive voluntary policies, Bithumb will improve the global standard of cryptocurrency exchanges.”
Japanese Governmental Impact
Much of the attention from the NCCT Initiative and the FATF on Money Laundering seems to be influenced by a recent report published by Mainichi Shimbum, an influential Japanese newspaper. In the report, they exposed millions of dollars of money laundering within three crypto platforms – Zcash, Monero, and Dash. All of these criminal activities come back to one cause – the Yakusa.
The Yakusa has been a long-standing crime syndicate, and it is one of the most powerful forces in Japan with over 100,000 members. In fact, they are closely intertwined with the Japanese government, and it has stayed that way since the 17th century. Once the report came out, the Japanese government automatically prohibited the use of certain digital assets by de-listing them.
An official from Mainichi stated,
“It should be seriously discussed as to whether any registered cryptocurrency exchange should be allowed to use such currencies. It’s a typical money laundering scheme. In a way, I’m not surprised. If you’re going to do something illegal, then everyone knows to use the ‘three anonymous siblings.’”
The FSA also highlighted the collaboration between other economies in the G20, helping to stop the use of anonymous crypto platforms, particularly with criminally prone groups. The official also added to the statement,
“It’s nearly impossible for Japan to handle the problem alone. Even if trade is restricted to only domestic transfers or monitoring is enhanced, it’s still not enough to counter money laundering. It would be best if all the group of 20 industrial emerging nations and regions (G20) would take the same steps toward prevention.”
In this ban, the economies have a fairly bold move that shows the need to have complete transparency in the crypto market. It may start a trend for other economies that want to consider listing themselves anonymously on the public market.