Korean investors can’t trade cryptocurrencies using virtual bank accounts

Korea will ban the use of anonymous bank accounts in cryptocurrency trading from Jan. 30, as part of steps to crack down on money laundering and other illegal practices.

“Traders will not be allowed to make deposits in virtual accounts that have been opened in banks unless the name of their bank account matches the account name in the cryptocurrency exchange,” said Kim Yong-beom, vice chairman of the Financial Services Commission (FSC), in a media briefing Tuesday.

Under the new guideline, investors can’t trade cryptocurrencies using virtual accounts in place in banks, as the banks will require traders to change virtual accounts to real-name ones.

Cryptocurrency exchange operators will have to provide banks with customer information, and the financial regulator will order banks to take appropriate steps if the exchanges fail to do this.

“The FSC wants banks to comply with the announced guidelines. We will keep an eye on them,” Kim said.

Once the banks introduce the system obliging virtual money investors to use their real names next Tuesday, they will close all existing virtual accounts, he added.

Korea is one of the hottest markets for bitcoin, the most popular cryptocurrency, as well as other virtual currencies.

Kim said the financial regulator mandated banks to notify the Financial Intelligence Unit (FIU) of any account which had deposits or withdrawals exceeding 20 million won a week, a step to prevent money laundering.

“If any questionable transactions are found, we will collaborate with the prosecutors’ office and the National Tax Service,” he said.

Kim said the FSC will punish banks if they fail to comply with the government’s efforts to crack down on the growing speculative trading of crypto-assets by the public.

The country’s six major banks, including the Industrial Bank of Korea, Nonghyup Bank and even the state-owned Korea Development Bank, made about 2.2 billion won in cryptocurrency trade commission last year.

The FSC has banned non-residents and underage investors from opening cryptocurrency accounts here.

The vice chairman said the government bears no responsibility for individual’s investment in crypto-assets as it has consistently said it can’t guarantee the proper value of cryptocurrencies.

“You can make transactions on crypto-products. But you have to take all responsibility for the results you get,” Kim stressed.

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