The South Korean government has announced that cryptocurrency traders will be fined if they do not convert from existing virtual accounts, which allows for anonymous trading, to real-name accounts. Regardless of their service levels to crypto exchanges, banks have been ordered to implement the new system this month as planned.
Crypto Traders Facing Fines
The South Korean financial authorities said on Sunday that cryptocurrency traders in the country “will be fined for refusing to convert their virtual accounts into real-name ones,” Yonhap reported.
Currently, crypto traders are able to trade anonymously by using virtual accounts. However, the authorities have banned banks from issuing new ones and mandated them to install the new system “that ensures only real-name bank accounts and matching accounts at cryptocurrency exchanges to be used for deposits and withdrawals,” the news outlet detailed, adding that:
Cryptocurrency traders will be allowed to convert their virtual accounts into real-name ones within this month, but those who refuse to accede to real-name identification will face fines.
“People who have traded virtual currency have been told that if they refuse to check their real name, they will be penalized for depositing into an existing account,” the Kyunghyang Shinmun elaborated. Only withdrawals will be allowed from existing virtual accounts.
South Korea first enforced the Real Name Financial Transaction System on August 3, 1993, forcing all financial transactions to be conducted under real names.
Until that time, financial transactions of large amounts between private parties were often conducted under false names or pseudonyms. In 2014, this law was revised and penalties of imprisonment of up to five years or a fine of 50 million won (~USD$47,000) were introduced.
While the amount of the fine has not been determined for violations by cryptocurrency traders, Yonhap pointed out that “In 1993, violators of the country’s real-name financial transaction system were slapped with fines amounting to 60 percent of their financial assets.”
Furthermore, Chosun quoted a government official saying, “Currently, we are establishing a taxation plan for virtual currency transactions centered on the accounting department. If a virtual currency real name verification system is introduced, we will be able to obtain data on individual traders.” […]