According to industry analysts, major South Korean crypto exchanges including Upbit, Bithumb and Korbit will follow the Coinone line and ban transfers to unverified wallets.
Coinone announced on Wednesday that it will reject deposits from unverified private wallets from January 24, 2022, to reduce the risk of money laundering. All Korean stock exchanges, including Upbit, Bithumb, Korbit and 20 other countries, are expected to implement similar or similar actions to Coinone by March 25. The Korean government has set a deadline for stock exchanges to accurately track foreign exchange transactions on and off their platforms.
“Korean stock exchanges are creating their own itinerary solutions to meet the demands after March,” Joon Hyuk Ahn, a Korean blockchain industry analyst, told Cointelegraph.
“All Korean stock exchanges must use some sort of itinerary system by March because that’s when the government sets a deadline for them. Coinone did it first.”
The exchange rule will also help the East Asian country comply with the FATF’s travel rules.
According to the anti-money laundering service (AML) Sygna, the travel rule requires national authorities to “ensure that local exchanges share genuine identity information with counterparties or meet increased AML / CFT monitoring.” “.
Corbett, one of the country’s four major stock exchanges, told the Cointelegraph that how it handles private wallets is being discussed, but no decision has yet been made. It also states: “Korbit identifies, assesses and monitors AML (Anti-Money Laundering) and FDS (Fraud Detection System) transactions in virtual asset transfers.”
The exchange’s compliance requirements are part of a long series of regulatory restrictions on cryptocurrency exchanges that began with the requirement for a bank account with a real name for all users. Prior to the introduction of this rule in 2018, it was possible to link cryptocurrency exchange accounts to a bank account owned by several individuals.
By September 2021, the stock exchanges must pass an audit of the Internet Security Management System and have one local partner bank that will issue real-name accounts. Stock exchanges that failed to meet the requirements were forced to remove the Korean won pairs from trading or suspend the service altogether.
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The country has also faced the FATF’s global compliance issues related to non-fungible tokens (NFT). Financial regulators changed the direction of NFT policy until the latest statement from the Financial Services Commission on 24 November that it would consider the possibilities of regulating and taxing NFTs.
Globally, South Korean stock exchanges are an exception to the rule. At present, there are no other major cryptocurrency exchanges that require users to verify their personal wallets.