South Korea’s regulations for banning anonymous accounts on cryptocurrency exchanges now have a definite launch date, and are due to be implemented on or around January 20.
As per local media reports (which cite anonymous sources within the finance industry), authorities will begin implementing the ban later this month in order curb speculative investment in cryptocurrencies, which has aroused the concern of the government.
The new regulations were announced last week. According to a statement issued by the government, the new rules are geared toward regulating speculation in digital currency trading, and designed to enforce KYC due diligence in crypto exchanges. In addition, the new rules will also strengthen AML procedures, and ban anonymous accounts on crypto exchanges. All crypto exchange users will need to connect their identification information with their real-name bank account, in order to make deposits or withdrawals.
Commenting on the need for new regulations, the government had stated:
“Cryptocurrency speculation has been irrationally overheated in Korea. The government can’t leave the abnormal situation of speculation any longer.”
New legislation will also be introduced, according to which regulators may be permitted to shut down any exchanges that do not adhere to the new guidelines. South Korea’s Financial Intelligence Unit and Financial Supervisory Service (FSS) will be in charge of implementing the regulations and ensuring that exchanges and banks adhere to the rules.
Cryptocurrencies are immensely popular in South Korea – one of the largest crypto exchanges, Bithumb, is based in the country, and digital currencies often trade at much higher prices on South Korean exchanges than they do on exchanges in other countries.
These latest regulations come after rules were introduced last month which prohibit minors from investing/trading in cryptocurrencies. Prime Minister Lee Nak-yeon had earlier urged regulators to take necessary steps as digital currencies had the potential to corrupt the nation’s youth.