December 23, 2024

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[THE INVESTOR] Following attempts by Korean authorities to clamp down on cryptocurrency activity, local banks are moving to ban the issuance of virtual trading accounts, accoring to news reports on Dec. 13.

Shinhan Bank and the Industrial Bank of Korea have stopped issuing virtual accounts, joining other banks that made similar decisions earlier this week. A day earlier, Korea Development Bank said it plans to stop all businesses related to cryptocurrency transactions starting in January next year.

Shinhan Bank, one of the most active in cryptocurrency exchanges along with NongHyup Bank, has also decided to stop issuing virtual accounts for three exchanges including the country’s largest exchange Bithumb. IBK Bank has joined the movement. 

“The government is mulling measures to regulate cryptocurrencies transactions. Under these circumstances, it is difficult to provide virtual services for trading platforms,” said an official at IBK. 

Related: 
Korea considers complete ban on Bitcoin trading
Korea mulls allowing partial bitcoin trade


KDB and Woori Bank will close the virtual accounts issued earlier this year, but Shinhan said it will maintain virtual accounts that have already been issued.

The measures came after Choi Jong-ku, chairman of Financial Services Commission, on Dec. 11 said the financial watchdog is mulling toughened measures including a complete ban on cryptocurrency trading.

NongHyup Bank, which provides virtual account services to several exchanges including Bithumb, Coinone and Korbit, is still continuing its services as of 1:13 pm.

KEB Hana Bank said it will await the government’s guidelines.

Users can transfer their money to trading platforms via a virtual account issued by a bank after which they can buy and sell cryptocurrencies.

Major banks have also stopped services for trading on overseas cryptocurrency exchanges.

Meanwhile, the government has imposed a 43.5 million won (US$39,879) penalty and a 15 million won fine on BTC Korea.Com, operator of Korea’s largest virtual currency exchange Bithumb, for leaking personal information of users. This is the government’s first punitive measure against cryptocurrency exchanges.

By Park Ga-young (gypark@heraldcorp.com)