Crypto Exchanges Bithumb And Coinone to Require Verified Crypto Traders to Process Withdrawals
South Korean Crypto Exchanges Bithumb And Coinone To Stop Withdrawals For Unverified Crypto Traders
Beginning next month, users of Bithumb and Coinone must have verified real-name accounts in order to deposit and withdraw the fiat currency.
Starting October 1 for corporate members and October 15 for individuals, the restriction to fiat withdrawals for Bithumb users comes months after the South Korean government required users to provide real names as a means of curbing money laundering through exchanges.
This apparently was not complied with very well, with only about half of users in four exchanges—Bithumb, Coinone, Upbit, and Korbit—providing real names to accounts, which are then linked to banks for deposits and debits.
Bithumb noted that the new restrictions did not apply to the transferring of cryptocurrencies. “Cryptocurrency transactions and withdrawals can be used normally,” the exchange said in its announcement. Coinone announced a similar change in policy. Regarding unverified accounts, the exchange said that
“Nonghyup Bank requested Coinone to limit the withdrawal of Korean currency.” By October 15, “we will limit the withdrawal of persons who have not completed the real name verification.”
Like Bithumb, Coinone emphasized that the new rule does not cover cryptocurrency transfers. It added that withdrawals should be done prior to October 15 for those who do not plan to convert their accounts.
The South Korean government introduced the real-name system for crypto exchanges. Members of an exchange using this system can convert their accounts to real-name ones at the bank that provides the conversion service to the exchange. So far, banks have only been offering this service to the country’s top 4 exchanges – Bithumb, Upbit, Coinone, and Korbit. Nonghyup Bank provides this service to Bithumb and Coinone.
Despite efforts by the government, banks, and exchanges, local media recently reported that only about 40-50% of accounts at the 4 exchanges have been converted to date. The banks have been pressuring crypto exchanges to take measures to ensure conversion in order to reduce the risk of money laundering.
Last week, banks, through industry representatives, said they would be limiting their services to cryptocurrency users without verified identities. The increased demands for transparency of user accounts come with moves to further regulate the industry similar to how traditional financial institutions are regulated.
At the same time, insurance of cryptocurrency exchange accounts has come to South Korea, signaling increased legitimacy of the industry.