Choi Jong-Ku, the commissioner of the Financial Services Commission (FSC) of Republic of Korea, has reaffirmed that there exists no problems associated with compliance and security in the method of banks providing virtual bank accounts to local cryptocurrency exchanges.
At the state affairs audit conducted by the govt of Republic of Korea to evaluate the progress of all government agencies and commissioners in the nation, commissioner Choi emphasized that as long as cryptocurrency trading platforms are well equipped with Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, digital asset platforms will be able to acquire banking services from the country’s commercial financial institutions.
“There exists no issue in banks providing virtual bank accounts to cryptocurrency exchanges. If digital asset trading platforms have KYC and AML systems in place, there's no drawback in issuing virtual bank accounts to exchanges,” commissioner Choi same.
In Republic of Korea, crypto exchanges employ a unique system called virtual bank accounts that enable users to deposit and withdraw the South Korean won instantly so that users can hold KRW on exchanges securely.
Crypto Investors Optimistic
In early 2018, the govt of Republic of Korea inspired banks to stop working with cryptocurrency exchanges to eliminate the chance of laundering money using digital assets.
While Nonghyup, a major commercial bank in Republic of Korea that has worked with crypto exchanges for over a year, continued to provide services to local exchanges, in mid-2018, even Nonghyup was pressured to finish its services to Bithumb and different major cryptocurrency exchanges.
The public statement released by commissioner Choi clarified the stance of the govt and local financial authorities towards cryptocurrency exchanges and in the years to come, local digital asset trading platforms will no longer suffer from the lack of banking services from major financial institutions in Republic of Korea.
South Korea Blockchain Association, that represents both little to medium-size and major cryptocurrency exchanges within the local market, expressed its optimism towards the newly established stance of the FSC and added that the initial drawback related to KYC and AML introduced by the FSC 10 months past have been resolved.
Considering the concerns of the FSC and native financial authorities towards security breaches, the Republic of Korea Blockchain Association and the country’s largest cryptocurrency exchanges have initiated the method of obtaining insurance to shield investor funds.
Bithumb, Upbit, Gopax, Korbit, Coinone, and other massive cryptocurrencies have also recently been approved by the govt of Republic of Korea for having adequate security measures and internal management systems in place.
In August, security analysts at KISA and the Ministry of Science and IT told local publications that UPbit, Bithumb, Korbit, Coinnest, Coinlink, Coinone, Coinplug and Huobi a have solid ecurity and internal management systems integrated into their exchanges.
South Korea’s Crypto Exchange Market Infrastructure Strengthening rapidly
This week, Bithumb, the second largest cryptocurrency exchange within the country, eliminated all banking options on its platform other than Nonghyup, its partner bank.
Investors, confused by the abrupt decision of Bithumb, experimented with rising crypto exchanges like Gopax, which is financed by the nation’s second largest commercial bank Shinhan.
Gopax, probably due to the help of Shinhan, supports deposits and withdrawals for all local banks in Republic of Korea, along with Kakao and Dunamu’s Upbit.
The competition in South Korea’s crypto exchange market is increasing with key players like Upbit, Gopax, Coinone, and Korbit gaining a lot of market share, providing investors with many alternative options.
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