Bithumb, a South Korean cryptocurrency exchange operator, said March 9 that it has put restrictions on crypto trading accounts held by users staying in regions that have not adopted anti-money laundering measures.
A total of 21 nations are currently on the watchlist for not failing to adopt anti-money laundering, or AML, measures issued by the Financial Action Task Force, an inter-governmental body that sets international standards to prevent global money laundering and terrorist financing.
Iran and North Korea have been blacklisted while 19 nations, including Yemen, Syria, Pakistan, and Botswana, are on the grey list. Countries supporting terror funding and money laundering activities are placed on the blacklist while nations on the gray list are considered safe haven for supporting terror funding and money laundering, according to the FATF.
The local crypto exchange firm has banned users from the 21 nations for opening new accounts while freezing the accounts of the existing users.
“The company will continue improving its system to protect investors, and enhancing transparency in the crypto market,” a Bithumb official said.
While verifying the identity of customers, the Korean firm has been also beefing up know your customer, or KYC, processes.
Joining forces with Octa Solution, it has developed AML solutions tailored for virtual assets. The crypto exchange firm has also adopted AML solutions provided respectively by US blockchain analysis firm Chainalysis and risk management solutions firm Dow Jones Risk & Compliance, it said.
Meanwhile, the rumored stake sell-off of Bithumb has resurfaced recently as US investment bank JP Morgan and the world’s largest financial derivatives exchange CME Group are reportedly mulling to acquire majority shares in Bithumb.
“JP Morgan has been talking with a person entrusted by one of Bithumb’s large shareholders over the acquisition,” a market insider was quoted as saying by local news outlet MTN.
The source also added CME Group sent a letter of intent to Bithumb for acquiring a controlling stake in the local firm in February.
In 2018, Bithumb Chairman Lee Jeong-hoon tried to sell the company to local gaming firms, including Netmarble, Nexon or NCSoft, but no deal was reached at the time. Since last year, he started negotiating with global companies, including Chinese crypto trading services firm Huobi. The Korean crypto exchange is also said to have been in talks with NXC, a parent company of Nexon, until recently.
It is estimated that the number of average daily users last month on the Bithumb platform reached 1 million while the daily transactions came in at between 5 trillion won ($4.4 billion) and 7 trillion won.
Dunamu, the operator of digital coin trading platform Upbit, is valued at some 2 trillion won while US crypto exchange Coinbase is estimated to be valued at 80 trillion won.
“Lee may hope that the corporate value of Bithumb reaches 2 trillion won at least,” an official in the crypto market said.
By Kim Young-won (email@example.com)