South Korea to Ban Anonymous Accounts in Cryptocurrency Transactions

The South Korean government has been engaged in a determined battle to combat the unregulated cryptocurrency exchange market. In an attempt to limit the amount of speculation and to protect the financial security of its investors, the government has been vigilant in conducting thorough inspections across the industry.

This morning, another step was taken to ensure the legitimacy of crypto trading, by requiring real names to be associated with accounts that intend on performing a transaction. Similar to any other financial instrument or portfolio, proper identification and security procedures are put in place, ultimately regulating the market and protecting its participants.

Hong Nam-ki, Minister of the Office for Government Policy Coordination, met with other vice ministers to address the growing concerns over the relatively unmonitored crypto market. Following the meeting, he announced a few changes to policies that will impact the trading process. The updated policy requires that any bank account used to fund a crypto transaction must be held under a valid name, which must match the name under its associated account at a crypto exchange. Additionally, the announcement reiterated the decision to prohibit issuing any new virtual accounts to crypto exchanges. Hong summarized his view, explaining that the government “can’t let this abnormal situation of speculation go on any longer.”

The Financial Intelligence Unit and the Financial Supervisory Service have been charged with enforcing compliance with the new demands. They will work in cooperation to supervise both issuing banks and crypto exchanges.

Strict Policy Enforcement

South Korea has remained stern in its position protesting the lack of regulatory restrictions in exchanges. The government is working tirelessly to put in place a series of regulations to standardize a currently disorganized market, where investors are at greater financial risk. One reason for the increased risk is rising speculation across the market, as global demand and volume of digital currencies are rapidly increasing.

Earlier this month, the Korea Communications Commission issued a fine to a cryptocurrency exchange due to a lack of proper security measures enforced with regard to user information. The turmoil in South Korea surrounding the cryptocurrency market appears to be intensifying.

(Photo: pixabay)

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