South Korean crypto exchanges to follow Coinone in verifying private wallets

Industry analysts predict that major South Korean crypto exchanges like as Upbit, Bithumb, and Korbit will follow Coinone’s lead and prohibit transactions to unverified wallets.

To lessen the danger of money laundering, Coinone stated yesterday that it will begin rejecting contributions from unconfirmed private wallets on January 24. By or before March 25, other Korean exchanges, including Upbit, Bithumb, Korbit, and 20 others, are anticipated to take similar or equivalent procedures to Coinone. The Korean government has set a deadline for exchanges to accurately track cryptocurrency transactions on and off their platforms.

“Korean exchanges are designing their own Travel Rule solutions in order to fulfill the criteria to operate post-March,” said Jun Hyuk Ahn, a Korean blockchain industry expert.

“By March, all Korean exchanges will have to adopt some sort of travel regulation system, since the government has set a deadline for them.”

The exchange rule will also assist the country in complying with the Financial Action Task Force’s (FATF) “travel rule.”

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The travel rule requires national governments to “ensure domestic exchanges share real-identity information with transmittal counterparties or face increased AML/CFT monitoring,” according to Sygna, an anti-money laundering (AML) compliance service.

These exchange compliance requirements are part of a lengthy list of regulatory constraints for crypto exchanges, which began with the need that all users to have a real-name bank account. Prior to the rule’s implementation in 2018, crypto exchange accounts could be linked to multiple people’s bank accounts.

Exchanges were expected to have Internet Security Management System (ISMS) authentication and a single domestic bank partner that would issue real-name accounts by September 2021. All exchanges that failed to satisfy the standards were compelled to withdraw KRW pairings from trading or shut down their operations entirely.

Nonfungible tokens (NFT) have also been a source of worldwide FATF compliance difficulties for the government. Financial authorities flipped-flopped on their policy approach on NFTs until the Financial Services Commission said on Nov. 24 that it will investigate its options for regulating and taxing NFTs.

South Korea’s exchanges are the exceptions to the norm throughout the world. Other prominent crypto spot exchanges do not now demand users to authenticate their private wallets.