As the KYC compliance regulations continue to pile heaps of pressure on the vast South Korean cryptocurrency population, there’s little doubt they have severely felt it. Coinpia seems to be the worst hit exchange given that it has been forced to halt trading and deposits, thereby inconveniencing many of its users.
Coinpia To Comply With KYC
Following an announcement made on Tuesday, 6th February 2018 and currently available on the exchange portal’s homepage, depositing of Korean Won has been stopped indefinitely. This is due to the new regulation in the country, recently enacted by the government to regulate the industry.
South Korea’s watchdog Finance Service Commission has been all arms against cryptocurrency investments in the country recently in a bid to regulate the rapidly expanding industry. Back in January 23rd, this commission announced to the public that from January henceforth, all cryptocurrency investors would be required to use their real names and bank accounts while trading. It was a perhaps the surest way of curbing anonymous traders, enforce anti-money laundry and comply with the know-your-customer rules.
What Is Coinpia South Korea Bitcoin Cryptocurrency Exchange?
Established in May 2014, Coinpia is a giant Bitcoin/Litecoin exchange that has been operating lawfully in South Korea. Its popularity grew recently following the sudden upsurge in the value of Bitcoin. However, its fame and acceptance were bolstered by its consistently strengthened security amid hacks and phishing attacks that many exchanges in the region faced and even succumbed to.
Halting its operations might have arrived at a period when nobody expected it, though it is the hostile working environment that’s primarily seen as an excellent way for the future of cryptocurrencies. It had promised to embark on research to improve customer service for its thousands of users. However, this latest move is a big blow to its blossoming superiority, no doubt!
According to CoinDesk, the Financial Services Commission (FSC) had issued the warning that was to comply with by banks as well. As per the directive, real-name verifications at domestic banks were to start being rolled out before January 30th. That was to mean an abrupt end to issuing of virtual accounts to cryptocurrency exchanges like Coinpia.
While Bithumb complied with this and had resumed trading, the opposite is true for Coinpia. This small exchange failed to integrate its verification system with local banking institutions. Yonhap, a major South Korean news outlet reported that Coinpia failed because most of the country’s banks couldn’t accept small and mid-sized cryptocurrency platforms and only chose to deal with established ones – Upbit, Bithumb, Coinone, and Korbit.
Bithumb, a major South Korean cryptocurrency exchange resumed operations after complying with the new directive. It chose Nonghyup Bank and Shinhan Bank, and this meant Coinpia had no other alternative, but to follow the same route. As Coinpia, it is a wait-and-see scenario for its vast user population given that there’s no definite date when it will resume normal operations.