[THE INVESTOR] Korea’s financial authorities said on Jan. 23 that the new real-name bank account system will be enforced next week, while unveiling a set of guidelines for financial institutions dealing with cryptocurrency exchanges after reviewing six banks that have provided virtual accounts to digital currency exchanges.
Once the new real-name account system is implemented on Jan. 30, unverified virtual accounts that have been used for the majority of cryptocurrency trading will be scrapped, Kim Yong-beom, vice chairman of the Financial Services Commission, told reporters on Jan. 23.
Korean authorities announce the real-name bank account system on Jan.23. Financial Services Commission
The new system also bans foreigners and minors from opening cryptocurrency accounts in Korea. Only domestic investors over 19 years old will be allowed to open cryptocurrency accounts under their real names.
The financial authorities said that six banks -- Shinhan, NH NongHyup Bank, Industrial Bank of Korea, KB Kookmin Bank, KEB Hana Bank and Kwangju Bank -- are ready to implement the real-name account system as of Jan. 23.
Even if the new system is put into effect, exchanges might not resume the much-awaited registration of new accounts right away, according to industry sources.
“We will wait and see how the cryptocurrency market stabilizes,” one Industrial Bank of Korea official told The Investor. IBK has provided 1.5 million virtual accounts to fast-growing digital currency exchange Upbit.
“We need to be more careful so we don’t think new registrations would be immediately possible on Jan. 30,” an official at Upbit said.
Opening cryptocurrency accounts has been banned for weeks until the banks install the new account system.
The Korea Financial Intelligence Unit -- a body that monitors illegal financial activities -- and the Financial Supervisory Service are among the financial authorities that unveiled guidelines for banks dealing with cryptocurrency-related accounts. The FIU and the FSS investigated cryptocurrency-related virtual accounts at the six banks for 10 days for irregularities before drawing up the guidelines.
Under them, banks are required to monitor and report high-risk transactions to the FIU. A single account with transactions of more than 10 million won (US$9,345) a day or 20 million won in a week, will be closely watched, according to FSC’s Kim.
As Korea, the world’s third largest country in terms of transaction volume, moves to tighten regulations, prices of major cryptocurrencies including Bitcoin and Etherium declined. As of 2:50 p.m., both Bitcoin and Ehtereum fell more than 6 percent to 13,236,000 won and 1,206,000 won, respectively.
By Park Ga-young (firstname.lastname@example.org)