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Reports of South Korea’s Plan to Curb Bitcoin Trading Bank Accounts

Latest clampdown designed to get tougher on crypto-crime

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Financial Regulators in South Korea are joining up to crack down on anonymous cryptocurrency banking accounts. The move is said to highlight cryptocurrency scams and money laundering activities by criminals who have found a safe haven in the sophisticated world of cryptocurrency.

According to a YonHap’s report (a Korean publication), the financial supervisory service is partnering  with the financial intelligence unit (KoFIU) to inspect about six banks that are currently providing Bitcoin and cryptocurrency trading to local institutions.

Banks to Be Inspected

The report on the publication further mentioned that senior officials from both financial regulatory bodies will carry out an intense investigation into various accounts, with the intention of determining whether the six banks have been operating within the obligatory protocols of South Korea’s local exchanges.

Out of the six banks (Kookmin Bank, Industrial Bank of Korea, Shinhan Bank, Woori Bank and Korea Development Bank), the officials reported that there are about 111 Bitcoin and cryptocurrency exchange-related bank accounts with a combined estimate of $1.8 billion in deposits. The report excerpt further indicated that each account had allegedly generated about a million in cryptocurrency revenue.

The developing story about the impending inspection on the six banks coincides with the overall agenda of clamping down on cryptocurrency exchanges, and implementing the recently-mandated rules by South Korea to curb and regulate cryptocurrency trading.

A Ban on Anonymous Bank Accounts

CCN reports that the South Korean government has proposed a ban on anonymous Bitcoin trading accounts in a crackdown that would see the eradication of money laundering and fraud in the industry. The government further added in a statement made in December that there are plans underway to “respond to such crimes by slapping maximum sentences possible on offenders,”

With the new trading rules due to be set for investors by the financial regulators, cryptocurrency account holders will have to match their accounts with their names so as to avoid being mistaken for offenders of money laundering and other cryptocurrency-related scams. Eventually, this will put a complete ban on anonymous bank accounts, with a Know Your Customer protocol set to kick off on 20th January 2018.

Image Credit: Deposit Photos

Do you think this move by South Korean financial regulators will protect investors in cryptocurrencies from scams and illegal investment programs, or will it cripple the cryptocurrency industry? Share your thoughts and opinions in the comments section!

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