Crypto Trading Ban In South Korea To Begin On January 20

News, Regulation | January 3, 2018 By:

The South Korean government will implement new measures to crack down on cryptocurrency trading on or around January 20, Yonhap News reported, citing financial industry sources.

Under the new measures, only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals, while the issuance of new virtual accounts to cryptocurrency exchanges will be banned. Cryptocurrency exchanges will also be banned from issuing virtual accounts to new clients.

The government will also strengthen requirements of local exchanges to prevent money-laundering, and toughen punishments for crimes related to cryptocurrency.

The new measures were announced last week by Hong Nam-ki, the minister of the Office for Government Policy Coordination. At the time, he said that the government “can’t let this abnormal situation of speculation go on any longer.” He added that the new measures are aimed at curbing the trading activity around cryptocurrencies in the country.

South Korea’s Financial Intelligence Unit and the Financial Supervisory Service (FSS) will oversee the rollout of the new measures, including inspecting exchanges and banks to ensure institutions are complying with the rules.

Last week, two major South Korean banks – Shinhan and KB Kookmin – decided to drop their bitcoin services in anticipation of the new measures. 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.