Following a month of uncertainty for Korean based cryptocurrency exchanges and investors, the South Korean government, banks, and exchanges are finding ways to appease all parties. The South Korean gov’t and banks do not have issues working with the exchanges so long as there is an agreed upon transparency in sharing user data. The gov’t has announced that six major banks will be approved and ready to provide services to cryptocurrency exchanges on January 30th.
The Korean Financial Services Commision (FSC) will require to know account holder’s real names as well as details of all transactions made on the exchange. The plan to increase K-Y-C(know your customer) rules have been in motions for months but slow or non-cooperating exchanges have caused the rumors and threats of a total ban on cryptocurrencies in Korea in general.
“Six commercial banks that have supported virtual currency transactions will establish a deposit and withdrawal system to convert [to] the virtual money real-name system and provide full-fledged services from the 30th.” – FSC
The increased regulations will be placed in hopes to block illegal funds from money laundering, decrease tax evasion, and filter out minors for whom virtual money investment is prohibited. Furthermore, the new system will allow the government to “grasp the virtual currency transaction information to some extent through the bank”, which isn’t popular with investors but there is no way around the matter with out operating illegally.