Korean crypto giant Bithumb stops issuing new accounts
One of the largest South Korean cryptocurrency exchange, Bithumb, on Wednesday suspended the registration of virtual accounts. The existing virtual accounts, however, are supporting withdrawal and deposits as usual. The move came after Bithumb could not renew its partnership contract with NH Nonghyup Bank in the stipulated time.
As per new Korean regulations, cryptocurrency exchanges are required to establish partnerships with banks, and virtual accounts can only be used for trading if they are backed by a KYC-attested bank account. In short, anonymous virtual accounts cannot be used for cryptocurrency trading in the country any more.
When the new rules came to light, Bithumb partnered with Shinhan Bank. Once the term got over, it decided to team-up with NH Nonghyup Bank. When the contract got over, the exchange tries to renew its partnership, but was met with a firm refusal. The bank’s apprehension stems from a recent hacking incident that caused Bithumb to lose assets worth $16.88 million.
An Nonghyup Bank was quoted by the Business Korea, as saying: “We have decided not to renew the contract because Bithumb still has problems in protecting consumers and information and preventing money laundering.”
The official added that the suspension of virtual account registration was temporary, and it would resume as soon as both parties reach a consensus on safeguarding users’ data.
“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,” he said.
On June 20, the exchange had disabled the deposits and withdrawals after cryptocurrencies worth millions were stolen in a major hack. For almost a month, Bithumb had disabled deposits and withdrawals, only allowing existing users on the platform to trade cryptocurrencies.