South Korean cryptocurrency exchanges have revised their policies to comply with the regulatory measures imposed by the country’s government last month.
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Services will no longer be offered to customers under the age of 19 and to non-Korean residents.
Furthermore, the issuance of new virtual bank accounts needed for cryptocurrency trades in the country has been suspended.
South Korea’s government released emergency measures for cryptocurrency regulation, mid-December.
Among other mandates, the country banned its financial institutions from dealing in cryptocurrencies – including buying, possessing, or holding them as collateral, AFP reported.
Additionally, Seoul rolled out trade bans for minors and non-Korean residents.
Banks in Korea that provide virtual bank accounts needed for cryptocurrency trades in the country will have to verify the identification of account holders when creating new ones and prohibit minors and foreigners from opening accounts.
The government is banning the use of anonymous virtual accounts in cryptocurrency transactions as part of efforts to curb virtual currency speculation.
The authorities will also review ways to force South Korean cryptocurrency exchanges to verify users’ real names, strengthen storage security of encryption keys and disclose purchase price and order volumes, according to Korea Herald.
Following the government’s announcements, South Korean cryptocurrency exchanges began altering their terms of service.
Four of the largest exchanges in the country – Bithumb, Upbit, Coinone, and Korbit – are no longer offering services to minors and non-Korean residents, starting with January 1. Existing customers under 19 years of age had until the end of December to withdraw money from the exchanges.
“The latest measures [on minors and foreigners] won’t have much impact on us as we are already very careful with minors and foreign investors. But they could hurt smaller and unorganized platforms which allow teenagers to trade virtual currencies,” an official at Bithumb, South Korea’s largest bitcoin exchange, told The Investor.
The issuance of new virtual bank accounts has been suspended on South Korean cryptocurrency exchanges in accordance with the new regulation, to comply with “requirements of real name verification for cryptocurrency transactions”.
Deposit or withdrawal requests involving already issued virtual deposit (KRW) accounts will not be restricted, according to Korean bitcoin exchange Korbit. “However, there may be an additional regulatory impact on KRW deposit or withdrawal requests in the future,” a Korbit statement read.
Last year, South Korea’s Financial Services Commission issued a directive that bans securities firms from acting as intermediaries for bitcoin futures transactions.
Moreover, the country unveiled plans to impose an income tax on cryptocurrencies.
“We will pursue taxation on virtual currencies such as bitcoin. Since virtual currency is a kind of property such as real estate or securities, it should be taxed according to the principle that there is a tax on income,” a National Tax Service official said.
At first, the country’s Ministry of Justice suggested a blanket ban on cryptocurrencies in South Korea. However, the government pushed back and tamed regulatory measures on concerns of “controversy over infringement of private property”.
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