Bitcoin Rewards Services Dropped By South Korean Banks

Announcements, News, Regulation | December 28, 2017 By:

Two major South Korean banks, Shinhan and KB Kookmin, are reportedly discontinuing their “credit card points for bitcoin swap” services. The banks decided to drop the services in anticipation of forthcoming government action on cryptocurrency trading, according to the Korea Times.

The South Korean government has been holding meetings daily to discuss cryptocurrency regulation. Earlier this month, it was reported that the regulators are planning to ban banks from activities involving cryptocurrencies. The Prime Minister’s office said Seoul would ban financial institutions from dealing in cryptocurrencies – including buying, possessing, or holding them as collateral.

As a result, Shinhan and KB Kookmin said they will end their cooperation with local cryptocurrency exchange Coinplug.

Shinhan’s rewards system, called Shinhan Fan Club, allows its members to receive points when using services from seven Shinhan affiliates, including Shinhan Bank, Shinhan Card, Shinhan Financial Investment, Shinhan Life, Shinhan Capital, Jeju Bank and Shinhan Savings Bank. The points can then be redeemed for bitcoins at Coinplug. The service is expected to be discontinued on January 15.

KB Kookmin Bank has a similar rewards system called Liiv Mate. It allows customers to collect and spend points on the bank’s credit cards. Points accumulate when customers use KB Kookmin credit cards at KB Kookmin Bank, KB Insurance, KB Kookmin Card, KB Investment & Securities, KB Life Insurance, KB Capital, and KB Savings Bank. The service will be discontinued on January 22.

Other local banks, including Woori Bank and the state-owned Korea Development Bank, are also preparing to close so-called virtual accounts belonging to cryptocurrency exchanges.