Most cryptocurrency investors in South Korea remain anonymous without moving their accounts to the government-mandated real-name system. So far, less than 10% of crypto traders have converted their virtual accounts into real-name ones.
8% Conversion Rate So Far
The real-name system for cryptocurrency exchange customers was introduced as part of the government’s cryptocurrency regulations and went into effect on January 30. The new system is supposed to replace the existing virtual account system which allows for the anonymous trading of cryptocurrencies. However, after one week, only 8.21% of all crypto virtual accounts in the country have been converted into real-name ones, local media report.
Six major South Korean banks have installed the real-name system. However, only three of them are offering the account conversion service to cryptocurrency exchanges: Industrial Bank of Korea (IBK), Nonghyup Bank, and Shinhan Bank.
According to the regulators, existing virtual accounts must be converted into real-name ones for traders to deposit money for crypto trading. This new system enables banks to confirm the identity of customers and fulfil their anti-money laundering (AML) obligations.
However, Yonhap reported on Tuesday that “the total number of accounts that these three banks have to convert to the real-name system is a total of 1,745,000.” After one week, “Only 143,330 of 1,745,000 accounts were converted,” which the news outlet elaborated:
Not even 10% conversion rate…1.6 million accounts have not confirmed their real names.
According to the publication, IBK has the highest conversion rate out of the three banks. This bank, which services the Kakao-backed exchange Upbit, has issued approximately 570,000 virtual accounts but has only converted 12.46% or 71,000 accounts into real-name ones after one week.
Shinhan Bank has converted 9.84% of Korbit accounts into real-name ones, or approximately 12,000 out of about 122,000 accounts.
Nonghyup Bank has converted about 13,000 accounts for Coinone, which is 8.67% of 150,000 accounts, the publication detailed.
The bank also converted 47,000 of Bithumb’s 900,000 accounts, which is 5.22%. The low conversion rate for Bithumb is largely due to its main bank, Shinhan, deciding to delay converting Bithumb’s virtual accounts while the police are investigating the exchange regarding the hacks last year. In addition to minors and foreigners being prohibited from opening an account, the news outlet elaborated:
The slow pace of real-name trading is that investors do not need to confirm their real name if they do not intend to spend more money on virtual currency.
Currently, customers using existing virtual accounts can continue to trade with existing funds and make withdrawals from the accounts without interruption.
Do you think the majority of South Korean traders will convert their accounts to real-name ones soon? Let us know in the comments section below.
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Author: Kevin Helms