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South Korea to Be More Strict on Bitcoin Exchange Rules



south korea exchanges

The government of South Korea announced it is making moves to bar domestic cryptocurrency exchanges from letting users make transactions through anonymous accounts.

In a series of updates geared to enhance oversight of industry practices, the government of South Korea will also seek to keep banks from issuing new virtual accounts to bitcoin exchanges.

According to reports, the announcements were made by Hong Nam-ki, the minister of the Office for Government Policy Coordination.

It came after talks with vice ministers from other governmental bodies about the recent rise in cryptocurrency interest and ownership domestically.

Cryptocurrencies, such as bitcoin and ethereum, have rapidly gained popularity in recent years.

South Korea is home to one of the world’s largest bitcoin exchanges.

About a million people are estimated to own some of the best-known digital currency.

Amid indications of overheating in cryptocurrency speculation, the government has kept on warning the public of the risks associated with virtual currency trading.

It has said virtual currency is not a “legal tender whose value is guaranteed by the central bank.”

Therefore, its prices could fluctuate by a great deal and result in enormous losses.

Hong’s announcement was made after the head of South Korea’s financial regulator cautioned against the bitcoin bubble during a meeting with the press.

“I bet the bubble in bitcoin will burst later,” said Choe Heung-sik, the governor of the Financial Supervisory Service (FSS).

Hong said that only accounts with real and matching identity could be allowed for deposit and withdrawals.

The government’s ban on using anonymous accounts, effectively a mandate that exchange providers perform know-your-customer (KYC) due diligence, is viewed as a move to curb the trading activity around cryptocurrencies in the country.

It can also be seen as the result of recent events in which government organizations were considering means to halt what they called an “overheating of virtual currency speculation.”

According to the report, the Financial Intelligence Unit and the Financial Supervisory Service will implement the regulation and supervise exchanges to abide the new rule.

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