Bithumb Launches Identification System to Assign Real Names to Virtual Accounts To Comply With AML
The crypto space in South Korea is among the most vibrant amongst today’s FinTech aggressive nations. This market accounts for nearly a fifth of the total crypto transactions globally despite the tough stance by authorities on cryptocurrency activities. Bithumb exchange, a leading platform in South Korea, has taken an initiative to play within the rules of FATF with its most recent product. The digital exchange developed an identification ecosystem ‘Value Network Domain Name System’ (VDNS) that will make it more regulatory compliant.
Bithumb has since issued a press release highlighting the VDSN product and its pros when it comes to regulation. The exchange noted that this service will come in handy for other exchanges as well in terms of international compliance. In addition, new businesses and users will be efficiently on-ramped going forward. Basically, the Bithumb VDNS will enable easier address identity authentication with the allocation of domain names that do not exceed 32 characters for each on-chain.
With this new approach, Bithumb is now more adaptable to regulatory uncertainties within South Korea. The country’s authorities through its Subcommittee on Parliamentary Affairs already amended the Act on Use and Reporting of certain financial disclosures. This move was in line with South Korea’s role as part of the larger global ecosystem when it comes to issues of money laundering and funding illegal activities. One notable requirement as per the amended act is a real name for virtual bank accounts; this was supported by Korea’s Blockchain Association.
Blockchain and crypto stakeholders who fail to comply with the Special Financial Transaction Information Act in Korea might be fined up to $42,000 or serve a 5-year jail term. The country’s financial watchdog has cracked down a number of digital accounts suspected to have been money laundering avenues in the past. As of press date, only a few crypto exchanges have the green light to operate in South Korea with Bithumb leading the list.