From Thursday, South Korean crypto exchange Bithumb will not allow users to withdraw crypto assets to unverified private wallets.
The exchange announced on Monday that it will become the second of four major exchanges in the country to ban withdrawals to unverified wallets. Coinone adopted a similar policy late last month, other major exchanges that have done so are Upbit and Korbit.
The new policy states that users can only register their personal wallets. To complete the registration process, users must complete additional KYC authentication.
Withdrawals to any local central exchange and external central exchanges with strict KYC process, such as Kraken, Bitstamp, Blockchain.com, Bybit and Binance.US, are still supported globally.
Local news agency Money Today reported that the exchange was facing pressure from its partner Nonghyup Bank, to make policy changes in line with FATF travel rules. The travel rule aims to ensure that financial institutions know the identities of senders and recipients of funds across national borders.
The bank strongly demanded that the exchange “ban all personal wallets that do not have their own KYC”. These wallets include MetaMask and MyEtherWallet.
Every South Korean cryptocurrency exchange offering trading pairs in Korean Won (KRW) must have a local partner bank that issues real-name bank accounts to users. A partner bank can have a strong influence on the rules of the exchange, as is the case with Nonghyup, Bithumb and Coinone.
Real-name bank accounts ensure that the person who accepts securities from the exchange is the same person who trades cryptocurrencies on the platform. This policy helps exchanges comply with travel regulations by the March 25 deadline.
So far, Upbit and Korbit exchanges have not issued any policy changes regarding personal cryptocurrencies. Exchanges will have to put in place these rules by March 25, when the Korean government deems it necessary for all exchanges to adopt such rules.