South Korea will implement new regulations aimed at banning anonymous cryptocurrency exchange accounts around January 20, according to Coin Desk.
While cryptocurrency investors around the globe continue to grow in number, some governments are not as enthusiastic. The South Korean government has recently made headlines for its moves relative to the booming space, many of which push back with added regulatory measures or outright bans. For example, the South Korean government followed China's lead in banning initial coin offerings (ICOs) in late 2017. (See more: After China, South Korea Bans ICOs.)
Around the same time, South Korean authorities mulled the possibility of taxing cryptocurrency trades as well. Perhaps even more dramatically, in the final days of 2017, the government suggested it might shut down cryptocurrency exchanges in order to curb "overheated" trading in the cryptocurrency space. (See more: Bitcoin Price Down After South Korea Moves To Reduce Cryptocurrency Mania.)
Regulations to Reduce Speculation
South Korea's move to ban anonymous cryptocurrency exchange accounts is seen as an effort to curb speculative investing in the digital currency space. It will augment and supplement existing "know-your-customer" rules which have long been active in the traditional banking world.
Essentially, investors with accounts on cryptocurrency exchanges will need to link those accounts with a separate bank account. They will also be required to provide identifying information if they wish to either deposit or withdraw funds.
To Combat Money Laundering
The South Korean government will reportedly supplement the new regulations concerning anonymous accounts with additional rules to combat money laundering. These include a ban on the creation of new anonymous virtual accounts. While it's unclear if the governmental authorities will make good on their threat to shut down cryptocurrency exchanges based in South Korea, this is a possibility as well.
The regulations were announced in the final days of 2017 by the minister of the Office for Government Policy Coordination, Hong Nam-ki. The South Korean government indicated it would not allow speculation in the cryptocurrency world to "go on any longer." The new rules may even restrict the way digital currencies can be advertised.
South Korea's Financial Intelligence Unit and the Financial Supervisory Service will be responsible for rolling out the new regulations, a process which involves inspecting banks and exchanges to insure compliance. The governor of the Financial Supervisory Service explained that his organization believes the bitcoin bubble will burst.
