Crypto monitoring escalated by South Korea considering real name system works 17416
News
Ashmita Dutta
Jun 30, 2018 at 2:53 AM

Crypto monitoring norms in South Korea is escalated by the government for the prevention of cryptocurrency purchase. In this context, the cryptocurrencies have been purchased by local exchanges from the foreign ones. These regulatory guidelines sought to curb this practice by the local crypto exchanges based in South Korea. According to a report by BCFocus, in India even the crypto exchanges are preparing themselves for the imposition of ban by the central bank.

In the initial phase of this week, Financial Stability Board (FSB) located in Basel, Switzerland organised a meeting. This meeting was attended by the vice chairman of Financial Services Commission namely Kin Yong-beom. The former, FSB, is an international authoritative body which aims to invigilate and recommend measures concerning global financial system. Few of the prominent members are European Commission, World Bank, International Monetary Fund, European Central Bank and Bank of International Settlements.

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In the words of Kim, “The so-called kimchi premium stood at 0.6 percent on June 19.” He further stated, “On Jan. 7, a speculative rally in bitcoin in South Korea prompted investors to pay premiums of 46.7 percent compared with international prices.”

The vice chairman went on to say, “Currently, there are small price gaps in cryptocurrency between local and international markets.”

Escalation of the monitoring system

The FSC made an announcement on Wednesday stating, “it will step up monitoring of money transfers between local and foreign cryptocurrency exchanges.” As per the report of Korea Times, The new guideline, which aims to prevent local cryptocurrency exchanges buying virtual coins at foreign exchanges to launder money, will come into force on July 10 for one year.” The planning of the financial regulator is “to closely keep tabs on bank accounts used by cryptocurrency exchanges for parking their expenses.”

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In January, 2018 the government of South Korea put forward the solution for crypto accounts, real-name system. Consequently, as per the publication, this step led to the “banning the use of anonymous bank accounts in transactions to prevent virtual coins from being used for money laundering and other illegal activities.” It was further stated, “The real-name trading system was also part of the government’s latest measures to curb speculative investment into virtual money.”

From the time the system has been introduced, it is quite often receiving criticism. The system is reprimanded since selective banks agreed to make the conversion of virtual accounts related to cryptocurrency trading to real name.

The rate of conversion is quite low and these few selective banks provides service only to the prominent exchanges. The list of the significant exchanges in the nation include Upbit, Korbit, Bithumb and Coinone.

According to the FSC, “The frenzied buying of bitcoin and other cryptocurrencies seen in January this year in South Korea has been fizzling since the government banned anonymous trading of cryptocurrencies.”

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