Seoul - The South Korean government will adopt a real-name financial transaction system on cryptocurrency exchanges by the end of January next year. It will also ban banks from providing virtual account services that are currently used for trading cryptocurrencies. Until the real-name financial transaction system is introduced, investors will be prohibited from making a new investment through cryptocurrency exchanges and making an additional investment.
The government plans to consider even shutting down the exchanges when a frenzy of speculation doesn’t subside. The government announced the “special measures to eradicate cryptocurrency speculation” at an urgent vice ministerial meeting presided by Minister of the Office for Government Policy Coordination on December 28. First of all, the government will require real-name cryptocurrency transactions in January next year. From now on, it requires that any bank account used to fund a crypto transaction must be held under a valid name, which must match the name under its associated account at a crypto exchange. This would help banks confirm investors’ account numbers and resident registration numbers and easily thin out minors and foreigners who are forbidden to trade at local cryptocurrency exchanges as well as catching suspicious illegal transactions like money laundering. Ju Hong-min, manager of electronic banking at the Financial Services Commission, said, “Since virtual account services will be stopped, investors will only be able to withdraw money from existing virtual accounts after selling digital currency but not to deposit additional money until the real-name financial transaction system is implemented.” Read more.