One of South Korea’s “big four” digital asset exchanges will no longer allow for the creation of new real-name virtual accounts, due to its failure to sign a contract with a partner bank.
According to BusinessKorea, Bithumb will at least temporarily cease creating new accounts on its exchange.
In January, the Korean government created new regulations that require cryptocurrency exchanges to partner with banks to implement the now-mandatory “real name system” when opening new accounts, as an attempt to prevent money laundering. These partnerships require renewal every six months. The three other big cryptocurrency exchanges – Coinone, UPbit, and Korbit – have all successfully renewed the contracts with their respective banks.
Bithumb had partnered with Shinhan Bank. When that contract ended, Bithumb approached NH Nonghyup Bank, which declined to renew its partnership. A representative from Nonghyup reportedly said, “We have decided not to renew the contract because Bithumb still has problems in protecting consumers and information and preventing money laundering.”
In December of last year, the trading platform was fined 60 million won for failing to sufficiently protect user data.
Bithumb has been suspected of tax evasion and poor business practices by a number of agencies in the past, but was cleared by the National Tax Service in early June. Later that month, the exchange suffered a hack that resulted in the loss of the equivalent of $31.5 million.
Irrespective of the statement from Nonghyup, Bithumb claims the freeze in account creation is temporary. “We have a consensus with Nonghyup Bank on renewal of the contract. We are planning to iron out our different views on some legal expressions and start issuing virtual accounts soon,” said an official from the company.
Tim Prentiss is a writer and editor for ETHNews. He has a master’s degree in journalism from the University of Nevada, Reno. He lives in Reno with his daughter. In his spare time he writes songs and disassembles perfectly good electronic devices.
Like what you read? Follow us on X @Bitnewsbot to receive the latest Bithumb, South Korea or other Ethereum wallets and exchanges news.
Previous Articles:
- Why Most ‘Smart’ Cities Haven’t Embraced Blockchain
- Blockchain Summer School Enters Third Year, Combines Theoretical And Practical Knowledge
- Coinbase Cryptocurrency Exchange Hires New Chief Compliance Officer
- IBM Joins Coalition Of Financial Institutions To Create Blockchain App Store
- How Blockchain Could Speed Hurricane Disaster Relief
