South Korea to Require Cryptocurrency Exchanges to Share User Data with Banks
Investing.com - South Korea’s government plans to require cryptocurrency exchanges to share users' transaction data with banks as part of a clampdown on cryptocurrency trading, the country’s Yohnap news agency reported Sunday.
Banks are expected to introduce the system, which will require cryptocurrency exchanges to share their users' transaction data with banks, late this month or early next month, according to an official from the country’s financial regulatory body.
Under the law, banks will be obliged to check whether cryptocurrency exchanges comply with the requirement.
Banks are currently banned from offering virtual accounts, which are needed to trade in digital currencies, to customers, a measure aimed at preventing speculation in the largely unregulated South Korean cryptocurrency market.
Opening anonymous cryptocurrency accounts is also banned until banks install a system that ensures only real-name bank accounts and matching accounts at cryptocurrency exchanges are used for deposits and withdrawals.
The government will also be able to access users' transaction data via banks, the official said, in what could be a move aimed at tax enforcement.
Cryptocurrency trading in South Korea is highly speculative and digital currencies are often traded at a premium, meaning that they are priced significantly higher in the country's exchanges than elsewhere in the world.
The country is one is one of the largest markets for major coins like bitcoin and ethereum.
South Korea’s government is examining multiple options for cracking down on cryptocurrency trading, including a blanket shutdown of cryptocurrency exchanges and a closure of only the ones acting illegally.
On Jan. 11 police raided the offices of Coinone and Bithumb, two of the country’s largest cryptocurrency exchanges on suspicions of tax evasion.
The country banned initial coin offerings last September.
Bitcoin was trading at $11,695 by 04:13 AM ET (09:13 GMT) on the Bitfinex exchange, down 8.76% from its previous close.
Ethereum, the world’s second largest cryptocurrency by market cap, was last at $1,051.40 on the Bitfinex exchange.
Meanwhile, Ripple's XRP token was trading at $1.36 on the Poloniex exchange.
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