SEOUL, Dec. 6 (Korea Bizwire) — A private association of cryptocurrency exchanges in South Korea said Wednesday that it will voluntarily restrict cryptocurrency transactions with bank accounts starting next year, in a bid to prevent such transactions from being used for money laundering and other crimes.
The Blockchain Association, an industry group of some 30 cryptocurrency exchanges, including Bithumb and Korbit, said it will encourage customers just one bank account in the selling and buying of cryptocurrencies.
Under the voluntary restrictions, which will be implemented Jan. 1, customers will be discouraged from using multiple bank accounts, the association said.
Currently, customers use virtual bank accounts when they buy or sell cryptocurrencies.
Concerns about possible money laundering linger over cryptocurrency transactions with virtual bank accounts because cryptocurrency exchanges could not verify where the money comes from.
The voluntary restriction will toughen guidelines for customer verification on their mobile phones.
Unless customers comply with the new guidelines, the amount of cryptocurrency withdrawals could be limited, the association said.
South Korea’s financial regulators have also said they will map out measures to prevent cryptocurrencies from being used as a tool for money laundering.
Cryptocurrencies, such as bitcoin and ethereum, have rapidly gained popularity in recent years, but risks are also growing.
South Korea is home to one of the world’s largest bitcoin exchanges, with about 1 million people estimated to have the best-known digital currency.
Despite a boom in transactions of digital currencies, such exchanges are largely unregulated as they are not recognized as financial products. Also there are no rules protecting people who invest in digital money.