Customers will now be unable to open new virtual accounts with the South Korean crypto exchange giant Bithumb. The new regulations came into effect from August 1. It is due to the lack of a banking partner that Bithumb has stopped issuing virtual accounts. The company has failed to renew and establish a contract with a bank, as mandated by new guidelines this year. However, customers who already have virtual accounts at the exchange, used for deposits and withdrawals through linked bank accounts will not get impacted by the freeze.
As per the new KYC mandated rules, only investors whose account name at the cryptocurrency exchange matches to their name at their bank-issued virtual account will be allowed for cryptocurrency trading. Also every time after six months, the cryptocurrency exchanges must renew their contracts with banks. At the moment, Bithumb is the only operator among Korea’s ‘big four’ exchanges without a banking partnership for virtual accounts.
It was at that time when six South Korean banks began issuing new trading accounts for cryptocurrency transactions that South Korean regulators initiated the budge to forbid anonymous trading through anonymous virtual bank accounts.
Support from Shinhan Bank
It was reported that Shinhan Bank supported Bithumb in a contract that has since been terminated. Later, Bithumb sought to renew a separate contract with Nonghyup Bank with a request that has been turned down.
The Bank’s official report read:
“We have decided not to renew the contract because Bithumb still has problems in protecting consumers and information and preventing money laundering.”
A Bithumb official said that they are working towards sorting the complications and will very soon start issuing virtual accounts. He also brought to the notice that the exchange had reached a “consensus” to renew the contract with Nonghyup Bank.