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South Korea Releases Official Guidelines for Cryptocurrency Exchanges and Banks

January 24, 2018 |

South Korea Releases Official Guidelines for Cryptocurrency Exchanges and Banks

The South Korean government has officially released two sets of previously promised guidelines that specify cryptocurrency regulatory measures. In addition to details of the new real-name system to end anonymous trading of cryptocurrencies, the government also published its anti-money laundering guidelines for banks providing services to cryptocurrency exchanges.

Also read: Cryptocurrency Activities Will Be Legal and Tax Free in Belarus Starting in March

Implementation of Crypto Measures

On Tuesday, the South Korean government officially released a document containing the guidelines for cryptocurrency regulations it previously promised. The announcement was made by Vice Chairman of the Financial Services Commission (FSC), Kim Yong-bum.

South Korea Releases Official Guidelines for Cryptocurrency Exchanges and Banks
The meeting where Kim Yong-bum announced cryptocurrency regulatory measures.

This document details the government’s Special Measures for the Elimination of Virtual Currency Speculation which was first announced on December 28. In addition, the government also announced on Tuesday its anti-money laundering (AML) guidelines, prepared by the Korean Financial Intelligence Unit (FIU), an FSC division, for all banks dealing with cryptocurrency accounts to follow.

Converting to Real-Name System

A large part of the government’s special measures concern the new government-mandated real-name account system. This system will replace banks’ current practice of virtual account issuance. Virtual accounts are issued by banks for cryptocurrency exchanges’ customers to use to deposit and withdraw money.

South Korea Releases Official Guidelines for Cryptocurrency Exchanges and BanksOn January 30, the real-name system will be live for deposit and withdrawal services to cryptocurrency accounts. Existing virtual accounts will be converted to real-name ones at that time. Six major banks will implement the new system including Shinhan Bank, Nonghyup Bank, Kookmin Bank, Hana Bank, and Gwangju Bank.

Customers need to open an account at the bank providing virtual account services to the exchange they are using. “New members should be added after strict identification procedures,” Kim was quoted by Joongang Ilbo. According to the document:

Users who do not have an account at the same bank as the virtual bank will not be able to make additional payments to the virtual bank [account], but they can withdraw money…Foreigner and minors under the Civil Law cannot use real name confirmation deposit and withdrawal account service.

AML and Suspicious Transaction Reporting

Earlier this month, the FIU and the Financial Supervisory Service (FSS) conducted on-site inspections of the country’s 6 major banks to ensure they have fulfilled their anti-money laundering obligations. The FIU subsequently created a set of anti-money laundering guidelines which was released on Tuesday.

South Korea Releases Official Guidelines for Cryptocurrency Exchanges and BanksCrypto exchanges usually separate their funds from users’ funds. However, the government’s inspections revealed that “some exchanges were found to have collected funds from users through general corporate accounts opened at banks,” the Kyunghyang Shinmun reported.

In some cases, customers’ funds were transferred to the bank accounts of the exchanges’ representatives. One exchange “collected funds from users through four bank accounts” into the company’s account “and spent 58.6 billion won” from it, the news outlet added. The financial authorities noted that this can lead to fraud and embezzlement.

The Hankook-Ilbo elaborated that banks are required to “monitor the exchanges [they service] for unusual transactions in accordance with the guidelines and, if suspected of money laundering, further confirm the transaction purpose and funding source,” adding that:

If the transaction amount is more than KRW 10 million per day, more than KRW 20 million for 7 days, or frequent transactions occur in a short time, it should be reported to the FIU, the money laundering monitoring authority. If the exchange has a high risk of money laundering or requires information, the bank may terminate the transaction.

What do you think of South Korea’s cryptocurrency guidelines? Let us know in the comments section below.


Images courtesy of Shutterstock and the Korean government.


Need to calculate your bitcoin holdings? Check our tools section.

The post South Korea Releases Official Guidelines for Cryptocurrency Exchanges and Banks appeared first on Bitcoin News.

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Cryptocurrency App Users Increase 14-Fold in South Korea

January 17, 2018 |

Cryptocurrency App Users Increase 14-Fold in South Korea

The number of cryptocurrency app users in South Korea has increased 14 times in the last 11 weeks to approximately two million users, according to a recent analysis. Users spend an average of 26 minutes using them daily and the majority of users are in their 30s.

Also read: South Korea Urges 23 Countries, EU, and IMF to Collaborate on Curbing Crypto Trading

A 14-Fold Jump

Cryptocurrency App Users Increase 14-Fold in South KoreaApplication analytics company Wiseapp recently conducted an analysis of 23,000 Android smartphone users in South Korea.

The company found that “Nearly 2 million South Koreans are estimated to have used cryptocurrency applications with their smartphone in the past week,” Yonhap wrote, adding that:

A total of 1.96 million people may have used apps that allow them to handle digital currencies, such as bitcoin and ethereum, last week, up from 140,000 tallied between Oct. 30 and Nov. 5.

Cryptocurrency App Users Increase 14-Fold in South Korea
Weekly chart of the number of crypto app users from Oct 30 to Jan 14. 196 is equivalent to 1.96 million.

According to Wiseapp’s data from October 30 to January 14, “Virtual currency app users increased 14 times in the last 11 weeks,” the company wrote. Popular apps include those related to cryptocurrency trading, particularly bitcoin, as well as “quotes, bulletin boards, etc,” the company detailed.

More South Koreans are increasingly using cryptocurrency apps despite multiple regulatory announcements, including the crackdown on anonymous crypto trading. The tax authority has also been discussing ways to tax cryptocurrencies.

In addition, two major exchanges, Bithumb and Coinone, are being investigated by the authorities. Then, over the weekend, the regulators announced that crypto traders could face fines if they do not convert from virtual accounts to real-name accounts once the new system is implemented.

Bitcoin App User Demographics

Wiseapp’s research also revealed that last month 1.8 million people used the top 10 bitcoin-related apps while 2.67 million people used the top 10 securities-related apps during the same time period. However, bitcoin app users spend an average of 26 minutes using the apps, which is twice the 13-minute daily use time for securities apps in the same period.

In addition, the company also found that 6.5% of bitcoin app users are in their teens, 24% in their 20s, 32.7% in their 30s, 21% in their 40s, and 15.8% are 50 and over.

Cryptocurrency App Users Increase 14-Fold in South Korea
Demographics of bitcoin app users (yellow) and securities app users (green). Source: Wiseapp.

What do you think of these stats on cryptocurrency app users? Let us know in the comments section below.


Images courtesy of Shutterstock and Wiseapp.


Need to calculate your bitcoin holdings? Check our tools section.

The post Cryptocurrency App Users Increase 14-Fold in South Korea appeared first on Bitcoin News.

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