The South Korean government introduced a new system under which now, cryptocurrency exchanges are required to pass information about transactions to the banks.
The financial services Commission of South Korea (FSC) on Sunday published further clarification regarding the system of identification of users of the cryptocurrency exchanges on the basis of real names.
The representative of the FSC said:
“The government plans to oblige the exchange of cryptocurrencies to transfer data about the user transactions to the banks. It is expected that banks will implement this system at the end of this month or early next.”
The new system will cease the practice of using virtual accounts that allow traders to anonymously trade cryptocurrencies. Now the banks will give clients cripture account to make a purchase or sale of virtual currencies. Regulators have banned financial institutions to issue a virtual account for as long as a new system does.
As reported by Digital Times, 6 commercial banks, including Nonghyup Bank, Industrial Bank of Korea, KB Kookmin Bank and Shinhan Bank, install the new system until January 30. Initially it was expected that the system will work until January 20.
The FSC said:
“6 commercial banks that support transactions with virtual currencies, will provide services using the system input/output means on the basis of real names since the 30th of January”.
The publication noted:
“The new service is aimed at existing users of the virtual accounts and creating new accounts while suspended for some time”.
After testing, the 6 largest banks in the country, the financial intelligence unit (FIU) has initiated the preparation of a manual to combat money laundering in the field of cryptocurrency.
A new identification system based on real names to conform with those requirements.
News publication wrote about it:
“It is expected that it will block illegal means received by a criminal way, and also will protect from investing a minor, which in any such activities engaged in prohibited. Banks are obliged to verify and keep records of transactions using the cryptocurrency”.
In addition, the new system will enable the government to some extent to obtain information about transactions with virtual currencies directly through banks.
“Because the government will have access to information about transactions using virtual currency, it will accelerate the process of taxation of such transactions.”