Bank of Korea reverses decision to stop cryptocurrency account services

Rage Comment : Due to strong protests from cryptocurrency investors in recent days, the South Korean government has re-discussed its regulatory policies, and the Bank of Korea has also abandoned its previous decision to stop providing cryptocurrency account services. However, the six major banks in South Korea must install a system to prevent anonymous cryptocurrency transactions as originally planned. Shinhan Bank also made concessions under pressure from investors, saying that it will continue to allow deposits into existing virtual accounts for the time being. However, the South Korean government announced last Sunday that virtual account owners may face fines once the real-name system is implemented.

Translation: Clover

Due to protests from cryptocurrency investors, the South Korean government has reconsidered its regulatory policy, and the Bank of Korea has abandoned its previous decision to stop providing cryptocurrency account services. However, the six major banks in South Korea must install a system to prevent anonymous cryptocurrency transactions as originally planned.

Banks’ attitude changes

According to Korea Joongang Daily, the Bank of Korea reversed its decision to stop providing cryptocurrency account services. “They will stick to their original plan to allow customers to open cryptocurrency trading accounts using their real names within this month.”

The original plan was for the bank to stop issuing virtual accounts and install a new government-mandated real-name authentication system. From then on, the bank would only issue real-name accounts. The new system is expected to be launched around January 20.

The news outlet reported in detail:

"The country's financial regulator has pushed banks to stop opening new accounts to prevent money laundering until they find a way to verify that the accounts are opened in the customers' real names."

As news.Bitcoin.com reported last week, South Korean regulators have begun inspecting six major banks in the country to ensure they have fulfilled their anti-money laundering obligations regarding virtual account services.

South Korean media Money Today reported that although the inspection will not end until January 16, some banks have decided to stop providing services for cryptocurrency accounts "due to pressure from financial authorities" and "criticism of banks supporting virtual currency transactions."

Subsequently, the regulator informed the six banks that their decision on whether to provide services for crypto accounts had nothing to do with their obligation to install the new real-name authentication system. As a result, the six banks agreed to install the new system as planned. According to the Korea JoongAng Daily, the Financial Services Commission (FSC) of South Korea said on Sunday:

“Banks will reopen new accounts after the FSC issues guidelines on anti-money laundering.”

Shinhan Bank backs down amid investor protests

Shinhan Bank was also among the banks that decided to stop servicing cryptocurrency accounts. Letters about the decision were immediately sent to cryptocurrency exchanges that are currently using the bank’s virtual account services, including the country’s largest exchange, Bithumb.

Yonhap News Agency reported that immediately after the bank announced the decision, “some Shinhan Bank users — most likely Bitcoin traders — threatened to boycott the bank.” Yonhap News Agency detailed:

"After the announcement, there was strong opposition from investors, and financial regulators decided to re-discuss relevant policies and require the provision of real-name confirmation services."

Shinhan Bank later reversed the decision, the news outlet detailed, saying the bank will review its virtual account opening policy and “will temporarily allow deposits to existing virtual accounts.”

Korea JoongAng Daily added:

“Shinhan Bank has notified major local cryptocurrency exchanges such as Bithumb and Korbit that they should come up with measures to deal with existing anonymous accounts.”

While Shinhan Bank users will still be able to deposit money into existing virtual accounts, the government announced on Sunday that anyone who uses the real-name system could face fines once it is implemented.