Korean Cryptocurrency Exchanges Required to Share User Data with Banks

Korean crypto exchanges are expected to provide user data to banks, allowing the government to track transactions and prevent tax evasion.

Updates from South Korea, as reported by a local publication, indicate that the government is enacting measures to ensure that cryptocurrency exchanges share user data with banks, allowing governments to track financial activity.

Currently, banks in the country are barred from working with cryptocurrency exchanges, a move aimed at curbing, what the government believes to be, an alarmingly high interest in speculative investments.

With new regulations in place, banks will be expected to link user data from cryptocurrency exchanges to actual accounts in the coming weeks, preventing any anonymous trading activity. The banks will also be required to ensure compliance on part of the exchanges.

Recently, there has been a lot of confusion around news from South Korea regarding a possible trading ban on all cryptocurrencies. Similar plans also seem to be in the works for China, which has already banned ICOs and shut down several exchanges.

As the whole cryptocurrency market boomed in 2017, world governments were forced to take notice, and since the whole space was unregulated, bad actors managed to scam new investors. Additionally, there have been taxation concerns, as governments realize that crypto investments and trading can return massive gains.

Tax authorities in India were also forced to take action after learning that $3.5 billion worth of cryptocurrency transactions took place during a 17-month period. The officials surveyed nine different cryptocurrency exchanges in the country before sending out tax notices to individuals believed to have profited majorly from investments and trading.

Last year, Coinbase, one of the biggest cryptocurrency exchanges, operating in the U.S, was asked by the Internal Revenue Service to hand over data related to over 14,000 users suspected of evading taxes.

Even though cryptocurrency transactions are largely anonymous, governments have sought to target cryptocurrency exchanges, where users convert fiat to crypto, making it easier for authorities to find the initial link.

With increasing scrutiny and governmental oversight, the crypto community has been vying for decentralized exchanges, but even so, the conversion of fiat to crypto remains a major hurdle in the way of true anonymity.