South Korea introduced a new cryptocurrency account system, finishing the present practice that allowed for anonymous trading. This will enforce the users and traders to open an account with real names.
Real Names Accounting system
Real name accounting system, focuses on every users and traders involved in cryptocurrency trading to convert their existing anonymous account into real name accounts.
This implementation of new real name accounts could possibly turn effective for the government to end the use of anonymous accounts in transaction which would prevent the coins for use in criminal and illegal activities such as money laundering ,etc.
According to report, Country’s six major banks will participate into it. Participating banks are Shinhan Bank, Industrial Bank of Korea, Nonghyup Bank, Hana Bank, Kookmin Bank and Gwangju Bank. Thus probably cryptocurrency accounts can only be registered with banks, which exchange is trading with.
Yonhap news reported
“Opening cryptocurrency accounts has been banned for weeks while the banks have installed the system, which ensures only real-name bank accounts and matching accounts at cryptocurrency exchanges for deposits and withdrawals.”
Underage and Foreigner investors are not allowed and are banned from opening cryptocurrency accounts.And System willing need cryptocurrency exchanges to share all transaction data with banks. Traders who tries to keep depositing its existing account regardless of following the process to open a new bank account, will be fined.
Identity verification such as real names of the bank account holder is only possible if the users/ traders holds an account with the bank, that is used by trading company.
Opening an account would need all the required documents such as Utility bills, credit card bills, payroll etc.
Hence these documents will provide a strong and serious validation of identity. And will prevent forgery.
Growing Business for Banks
Maekyung, Maeil Business Newspaper wrote that “The market forecasted that there will be a lot of requests for opening new accounts following the introduction of the real-name system,”.
However the expected changes didn’t found at least on the first day of announcement.
Expected growth of Business for Bank could be true as per the statistics. Bithumb trades with Nonghyup Bank and Shinhan Bank, Upbit with Industrial Bank of Korea (IBK), Coinone with Nonghyup Bank, and Korbit with Shinhan Bank.
“Looking at the number of virtual accounts that are subject to the real-name system conversion, IBK has 570,000, Nonghyup Bank 1 million, and Shinhan Bank 140,000.”
Small Exchanges more likely to suffer
Conversion of anonymous accounts into real accounts could cause distotion, which are likely to be suffered by Small and medium sized cryptocurrency excahnges. As banks will be reluctant to issue new accounts for them and they cannot use their corporate accounts.
10 Companies including Coinnest,Coinlink, Eyalabs etc uses corporate accounts instead of virtual accounts. With this new system, they have fallen into blind spot of regulation.