South Korea's new digital currency system entered into force on Tuesday, ending the current practice of anonymous currency trading. Traders have to open "real name" accounts at the same banks as their trading platforms, to deposit money for digital currency trading.
Force the real name system :
South Korea began today to convert default digital currency accounts into "real name" accounts, according to an order issued by its government. The application of this new accounting system effectively eliminates the anonymous use of bank accounts in transactions, in order to prevent the use of digital money laundering and other illegal activities, according to the Yonhap news agency.
Six of the country's major banks have joined the new system so far: Shinhan Bank, Nonghyup Bank, Industrial Bank of Korea, Kookmin Bank, Hana Bank and Gwangju Bank. In this regard, the Agency clarified the following:
"The opening of the digital currency accounts has been blocked for weeks as banks have been installing the new system, which ensures only the real bank name accounts and corresponding accounts on the digital exchange platforms for use in deposits and withdrawals"
"The new system requires that digital currency platforms share user transaction data with banks," the agency said, noting that foreigners and non-qualified people were prohibited from opening accounts on digital currencies in South Korea. Traders with digital accounts will be fined mainly if they continue to deposit funds in their accounts.
Business continued as usual for banks :
"Maekyung" wrote that markets predicted there would be a lot of requests to open new accounts after the introduction of the real name system. However, on the first day of the real name system, the news window indicated that banks were experiencing slight changes from the previous year, adding that some customers might be able to open accounts online.
An official at the Korean Industrial Bank (IBK) told the news window that "there is no big difference" in the number of customers opening accounts at the bank.
A reporter from the newspaper Chosun visited several banks without noting the unusual movement of customers. In Shinhan Bank, there was no customer guide with definitions of terms related to digital currencies, although it contained a guide to anti-money laundering guidelines.
Verify the real name :
Korea Business reports that real name verification is only possible if there is an account for the name of the person in the bank used by the company trading in the digital currency.
In order to open a new bank account for digital currency trading, customers must submit their documents to the bank, such as payroll, utility bills and credit card payments, the paper said. As for trading platforms, Bithumb will handle each of Longhon, Shinghan and Upbit with IBK while the Coinone platform will deal with Nonghyup Bank. Hankyung wrote that given the number of digital accounts to be converted into the real name system, IBK has 570,000 of them, while Longhyup has a million accounts.
Affected by small trading platforms :
Small and medium-size digital trading platforms are expected to experience a shift to the real name system, according to a local media report, which indicated that banks do not want to issue new accounts, while they can no longer use the accounts of their listed companies.
The Korean Blockxin Association has revealed that 10 of its 25 digital platform members use corporate accounts instead of digital accounts. These companies include Coinnest, Gopax and Coinlink as well as Eyalabs.
"Platforms that have not been granted digital accounts have fallen under intense regulatory oversight"
