SEOUL, Aug. 17 (Korea Bizwire) — Some foreign cryptocurrency exchanges have distanced themselves from South Korea as Korean authorities are set to enforce tighter regulations against virtual coins.
By Sept. 24, cryptocurrency exchanges targeting Korean investors must register with the nation’s anti-money laundering body and disclose their details on risk management.
Under the tougher regulations, banks will issue real-name accounts in line with stricter guidelines to prevent money laundering.
Beginning Sept. 25, cryptocurrency exchanges will be banned from withdrawing money for cryptocurrency trading if they have no real-name bank accounts.
Bitfront, a U.S.-based cryptocurrency exchange set up by the messaging app company Line, has said it will stop providing a Korean-language service on Sept. 14.
Citing the tougher regulations, Bitfront also said it will discontinue payments with Korean credit cards on Sept. 14.
Last week, Binance, the world’s largest cryptocurrency exchange, announced it halted trading pairs and payment options using the Korean currency.
Many analysts have predicted that minor Korean cryptocurrency exchanges, which are estimated to number around 100, would face shutdowns because they are unlikely to comply with the tougher regulations.
Despite repeated warnings from policymakers, Korean investors have been heavily buying virtual currency as they see it as a lucrative asset amid the pandemic.
More young people have been investing in cryptocurrencies, anticipating higher returns, with some saying they cannot buy homes solely with their income amid skyrocketing home prices.
Separately, South Korea plans to impose a 20 percent tax on capital gains from cryptocurrency transactions next year as scheduled, despite investors’ calls for delaying the taxation plan.