Only a 19% conversion – South Korean bank sends notice to all Bitcoin virtual account holders

Real name trading was effective from Jan 30th after the South Korean government wanted to stop anonymous trading. The recent notice by the South Korean banks states that the issuance of account holders will be suspended in case of no real name verification made on cryptocurrency transactions on virtual accounts.

A local South Korean news agency, Yonhap News Agency reported that only 19 percent of all virtual accounts have been converted into real-name accounts. The countries’ government banned anonymous trading completely on January 30, stating only real name accounts will be allowed to trade or invest in cryptocurrencies. 66 members of the cryptocurrency industry in South Korea formed Korean Blockchain Association and submitted themselves for ‘self-regulation’ and willingly admitted to going through evaluations.

Yonhap also stated:

“The association, composed of 33 virtual currency exchanges, said 21 of its members, including major players Upbit, Bithumb, Korbit, and Coinone, will undergo evaluations.”

Coinone, one of the biggest exchange platform in South Korea has the highest conversion at 26 percent, followed by Upbit, Korbit, and Bithumb.

Kim Hwa-joon, the Vice-President of Korean Blockchain Association states:

“It will include capital standards, security standards, principles on listing procedures, disclosure of information, etc, and I expect investors to believe that they [exchanges] are more stable if they have passed the examination.”

Within a week, about 8 percent of total users converted their accounts to real-name accounts. Analysts say that the drastic drop in Bitcoin and other Altcoin prices is the reason for people to not convert their accounts.

The system is introduced by the Korean government to tackle money laundering and terrorist fundings. Majority of the accounts are handled by 3 local banks, namely, Industrial Bank of Korea, NH Bank, and Shinhan Bank. The Shinhan Bank which operates 125000 virtual accounts, so far, has succeeded in converting 28 percent of them, followed by Industrial Bank of Korea [IBK] with a conversion rate of 22 percent.

Even though all these numbers are looking good, they are not able to reach the target. Since only the large exchanges are being targeted, medium and small exchanges are not covered by these banks. Only 3 of the 6 banks are installed with the system to check on the accounts.

The Korean Financial Supervisory Services [FSS] has urged the banks to speed up the process. However, it is up to the banks to choose whether to do it or not.

An FSS official quoted:

“We aimed to secure transaction transparency and prevent money laundering through a bank real name account…It is out of our goal and authority to manage more than that.”

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