Two major South Korean cryptocurrency exchanges have announced that they will no longer allow unverified users to make withdrawals in Korean won. Starting next month, users of Bithumb and Coinone must have verified real-name accounts in order to deposit and withdraw the fiat currency.
Bithumb Goes All Real-Name
Bithumb, the largest crypto exchange by trading volume in South Korea, announced on Friday, Sept. 14, that it will terminate fiat withdrawal service for all users without verified real-name accounts.
The service will end on Oct. 1 for corporate members and on Oct. 15 for individual members. Bithumb says the move is to comply with the government’s anti-money laundering policy.
However, the exchange clarified that this announcement only affects fiat withdrawals, emphasizing:
Cryptocurrency transactions and withdrawals can be used normally.
The South Korean government introduced the real-name system for crypto exchanges at the end of January. Members of an exchange using this system can convert their accounts to real-name ones at the bank that provides the conversion service to the exchange.
So far, banks have only been offering this service to the country’s top four exchanges – Bithumb, Upbit, Coinone, and Korbit. Nonghyup Bank provides this service to Bithumb and Coinone.
Despite efforts by the government, banks, and exchanges, local media recently reported that only about 40-50 percent of accounts at the four exchanges have been converted to date. News.Bitcoin.com reported last week that banks have been pressuring crypto exchanges to take measures to ensure conversion in order to reduce the risk of money laundering.
Coinone Makes Similar Move
South Korea’s third-largest crypto exchange, Coinone, also made a similar announcement on Friday.
The exchange explained that “Nonghyup Bank requested Coinone to limit the withdrawal of Korean currency” for members who have not verified their accounts by a certain date “pursuant to the Act on Reporting and Utilization of Specific Financial Transaction Information.” Coinone elaborated that effective Oct. 15:
In order to comply with the government policy related to virtual currency transactions, we will limit the withdrawal of persons who have not completed the real name verification.
After Oct. 15, users who do not have real-name accounts will be “unable to deposit and withdraw in Korean currency,” Coinone wrote. The exchange is asking users to make withdrawals before that date if they do not plan to convert to real-name accounts by then.
“When you authenticate real-name verified accounts, you can deposit and withdraw in Korean currency,” Coinone described. Like Bithumb, the exchange reiterated that the notice does not affect crypto trading, deposits, or withdrawals. Both exchanges have also confirmed that corporations, minors, and foreigners are not eligible for real-name conversion.
At the time of this writing, Upbit and Korbit, which do not use Nonghyup Bank, have not announced that they will stop providing Korean won withdrawal service to unverified users.
What do you think of Bithumb and Coinone disallowing fiat withdrawals for users without real-name accounts? Let us know in the comments section below.
Images courtesy of Shutterstock, Bithumb, and Coinone.