Real-Name Cryptocurrency Purchases Required by Korean Financial Authority

Korean Financial Services Commission has shared the real-name transaction system to be followed for cryptocurrency purchases in the country.

South Korean Financial Services Commission (FSC) has announced guidelines for a real-name transaction system, to be adopted by cryptocurrency buyers and exchanges, starting today.

According to the Korea Herald, the FSC Vice Chairman, Kim Yong-beom, made the announcement during a press conference in Seoul.

Under this new system, traders and investors will be able to start buying cryptocurrencies with fiat again, as long as they use real-name accounts in the same banks as the cryptocurrency exchanges.

This move will come as a relief to those who were unable to purchase cryptocurrencies since last month, when the government made moves to ban anonymous purchases and there were talks of outright trading bans. 

Kim Yong-beom cited the prevention of illegal activities as the main reason behind these new rules and it is expected that six banks, Nonghyup Bank, Shinhan Bank, KEB Hana Bank, KB Kookmin Bank, the Industrial Bank of Korea and Gwangju Bank, are going to be implementing this system. 

Meanwhile, the banks chosen by cryptocurrency exchanges are going to be important, since the biggest exchanges will attract account holders looking to convert fiat into crypto. As of now, large exchanges like Bithumb, Coinone and Korbit have not announced their plans, but discussions are underway.

Earlier this month we reported how the South Korean government is enacting measures to require cryptocurrency exchanges to share user data with banks in order to facilitate following the money.

While the country’s government, like others around the world, highlights illegal activities as the reason behind regulations, curbing tax evasion is a huge motivation for financial authorities as well. Since Bitcoin and cryptocurrencies are largely anonymous in their transactions, the logical step for governments has been to crackdown on points where cryptocurrencies and fiat money intersect – exchanges.

Even though regulations and the removal of anonymity are against the spirit of cryptocurrencies, investors and traders have to follow the law of the land, and it appears that more countries are going to follow suit and tighten their grip around the big money being made in cryptocurrencies.