In January this year, South Korea introduced the real-name act. Under the new rule, all investors in the cryptocurrency industry must use their real names in making transactions. However, new reports from local news outlets indicate that crypto currency traders aren’t exactly abiding by the law. The reports reveal that only 40-50% of local accounts use real names.
Local banks are responding by limiting services to customers that are not yet trading within the set rules. The customers cannot transact business using their bank accounts. Restrictions involve depositing funds into the accounts. Banks will only allow the users to withdraw funds.
Crypto currency traders facing hard times transacting through banks
The new bank policies aim to bring transparency in the virtual currency market. The real-name policy targets money laundering activities and tax evasion. In light of this, Kinews, a local news outlet says:
“Banks will take measures to limit services unless they (customers with virtual accounts) switch to real-name verified accounts by a certain date. After a certain point in time, [if] new real-name verified accounts are not issued, some restrictions on the Korean won deposit / withdrawal will be considered.”
Kinews reports that the Korean government is taking the regulations very seriously. To that end, the outlet reveals that the South Korean Ministry of Science And Technology is training blockchain specialists. The Ministry hopes that the specialists will assist in cracking down on users with pseudonyms.
An international discipline system
On the other hand, South Korean officials are calling for a global regulatory system for cryptocurrencies. Yoon Suk-heun, Governor of South Korea’s Financial Supervisory Service (FSS) says joint regulations of cryptocurrencies are beneficial to all economies. The governor made the comments during the 20th Integrated Financial Supervisors Conference (IFSC) in Seoul last week.
According to the governor, joint regulations will not only avoid money laundering but will also allow the crypto market flourish. He said:
“The aim is to calm overheated speculation and prevent illegal activities against new risks associated with virtual currency. We need to create an international discipline system, which can only generate regulatory gains between countries.”