The South Korean government has been working on a system to enforce real-name identity verification on cryptocurrency traders. This system is expected to be implemented around January 20, thus ending the current practice which allows for anonymous crypto trading.
Government’s Real-Name System
The Korean government announced last week its decision “to implement a virtual currency trading real-name system as a special measure to eradicate virtual currency speculation.” According to Yonhap, sources familiar with the matter said on Tuesday:
The South Korean government has been developing a system that is likely to start banning the use of anonymous accounts in cryptocurrency transactions from around Jan. 20.
So far, Koreans have been able to trade cryptocurrencies anonymously through the use of virtual accounts, which are issued by banks for crypto exchanges to assign to their customers. However, the regulators believe that these accounts are “used as virtual currency trading accounts to disseminate speculation and hinder transparency in financial transactions.” The issuance of new virtual accounts have now been prohibited, which major crypto exchanges have already complied, as news.Bitcoin.com previously reported.
Other Crypto Regulatory Plans
The government also announced that it will “strengthen banks’ anti-money laundering obligation on virtual currency exchanges.” This will require financial institutions to report suspicious transactions related to crypto exchanges to the authorities. Banks must also “exclude financial services for unhealthy exchanges that do not follow the government’s emergency measures,” the regulators described.
Furthermore, “the prosecutors and police have set up a plan to crack down on virtual currency-related crimes in 2018.” They will investigate illegal acts such as market manipulation and arrest the people in charge, the government explained.
At the meeting last week of the Korean National Economic Advisory Council, presided over by President Moon Jae-in, the Minister of Strategy and Finance Kim Dong-yeon announced the country’s “2018 economic policy direction.”
It includes plans for the National Police Agency to intensify the crackdown on illegal crypto activities. The Korea Customs Service, the prosecutors’ office, and the police have been put in charge of investigating actual violations of the Foreign Exchange Transactions Act. Meanwhile, “the Ministry of Science and Technology and the Korea Communications Commission will periodically check cryptocurrency exchanges,” the regulator detailed.
What do you think of the government’s real-name verification system and other regulatory plans? Let us know in the comments section below.
Images courtesy of Shutterstock and the South Korean government.
Need to calculate your bitcoin holdings? Check our tools section.