The new South Korean cryptocurrency account system has entered into force nationwide today, ending the current practice that allowed for anonymous trading of cryptocurrencies. Traders must open real-name accounts at the same banks as their exchanges in order to deposit money to trade cryptocurrencies.
Real-Name System Enforced
South Korea begins converting existing virtual cryptocurrency accounts to real-name accounts today as mandated by the government.
The implementation of this new account system effectively ends “the use of anonymous bank accounts in transactions to prevent virtual coins from being used for money laundering and other illegal activities,” Yonhap reported.
Six major banks in the country are participating in this new system so far: Shinhan Bank, Nonghyup Bank, Industrial Bank of Korea, Kookmin Bank, Hana Bank, and Gwangju Bank. The news outlet elaborated:
Opening cryptocurrency accounts has been banned for weeks while the banks have installed the system, which ensures only real-name bank accounts and matching accounts at cryptocurrency exchanges for deposits and withdrawals.
“Foreigners and underage investors are banned from opening cryptocurrency accounts in South Korea,” the publication noted, adding that “The new system also requires cryptocurrency exchanges to share users’ transaction data with banks.” Traders with existing virtual accounts will be fined if they keep depositing money into their existing accounts.
Business As Usual for Banks
“The market forecasted that there will be a lot of requests for opening new accounts following the introduction of the real-name system,” Maekyung wrote. However, on the first day of introducing the real-name system, the news outlet noted that banks are seeing little changes from the previous year, adding that some customers may have opened accounts online.
An IBK official told the publication that “there is no big difference” in the number of customers opening accounts at the bank.
A Chosun reporter visited several banks and found no unusual traffic. At a Shinhan Bank branch, there was a “customer guide” with definitions of crypto-related terms. It also includes an anti-money laundering guideline…