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THE INVESTOR
December 11, 2019
Big Reunion

Korea to require cryptocurrency exchanges to share user data with banks

  • PUBLISHED :January 21, 2018 - 16:05
  • UPDATED :January 21, 2018 - 16:09
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[THE INVESTOR] The government plans to require cryptocurrency exchanges to share users’ transaction data with banks, in a potential move to impose taxes on the transactions, an official at financial authorities said on Jan. 21.

Currently, financial authorities ban banks from offering virtual accounts, which are needed to sell or buy cryptocurrencies, to individual customers, the latest measure to help prevent speculative investment for virtual coins.

Opening anonymous cryptocurrency accounts is also banned until banks install a system that ensures only real-name bank accounts and matching accounts at cryptocurrency exchanges to be used for deposits and withdrawals.

Banks are expected to introduce the system, which will require cryptocurrency exchanges to share users‘ transaction data with banks, late this month or early next month, according to the official.

Under the law, banks are obliged to check whether cryptocurrency exchanges comply with the requirement, the official said.

In a measure of tax enforcement for cryptocurrency investors, the government can access users’ transaction data via banks, the official said.

South Korea‘s financial authorities have been stepping up monitoring of cryptocurrency trades amid concerns that a bubble may be set to burst.

Cryptocurrencies, such as bitcoin and ethereum, have rapidly gained popularity in recent years among South Korean investors hoping to make quick money. South Korea is home to one of the world’s biggest private bitcoin exchanges, with millions of people estimated to own some of the best-known digital currency.

Despite a boom in cryptocurrency transactions, the exchanges go largely unregulated in South Korea as they are not recognized as financial products, with the country having no rules for protecting virtual currency investors.

Meanwhile, the customs office began to look into possible cases of overseas cryptocurrency speculations, as part of the nation‘s recent moves to curb the overheated market.

“We suspect that there have been cases of outbound travelers taking a lump sum on their trip and frequently making speculative purchases,” said an official of the Korea Customs Service.

Popular countries were Thailand and Hong Kong, were cryptocurrency tends to be cheaper than in Korea.

The recent increase in the amount of outbound cash is also partly attributable to such speculative acts, the office added.

By Bae Hyun-jung/The Korea Herald
(tellme@heraldcorp.com)

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