A digital board at Bithumb shows cryptocurrency prices June 1, 2021. (Yonhap)
Amid the recent market frenzy surrounding cryptocurrencies like Bitcoin, the volume of deposits and withdrawals made through bank accounts for virtual coin trading has surpassed 64 trillion won ($57.85 billion), data showed June 1.
During the first quarter, nearly 64.2 trillion won flowed in and out of real-name bank accounts from commercial lenders, including Shinhan Bank, NH Nonghyup Bank and internet-only K bank, for digital token investments through South Korea’s four major cryptocurrency exchanges -- Upbit, Bithumb, CoinOne and Korbit -- according to Rep. Kim Byung-wook of the ruling Democratic Party, quoting data from the market watchdog Financial Supervisory Services.
Under the current regulations, all virtual asset service providers must acquire verifiable accounts in their real names from local banks after evaluations of their financial stability as well as the soundness of their business models. Of 200 domestic exchanges, only the four aforementioned coin operators have access to such accounts so far.
Backed by the crypto boom, the commissions that local banks received from coin exchanges for issuing real-name bank accounts also sharply increased.
K bank reportedly gained some 5 billion won from Upbit during the first quarter, which is 10 times higher than the 560 million won estimated in the fourth quarter last year. NH Nonghyup Bank got 1.3 billion won and 330 million won from Bithumb and CoinOne, respectively, in the same period, while Shinhan Bank received 145 million won from Korbit, data showed.
“The number of real-name bank accounts for coin trading as well as the amount of commissions paid by cryptocurrency exchanges to local banks surged in recent months, largely due to the growing speculative fever in crypto markets fueled by market liquidity,” Kim said.
“The financial authorities and major commercial banks should roll up their sleeves to protect crypto investors from possible crypto scams and external hacking attacks targeting local coin operators.”
By Choi Jae-hee (firstname.lastname@example.org)