The Korean Financial Services Commission has officially announced its stance on the relationship between crypto exchanges and banks. While previously many banks including the Korea Development Bank, Industrial Bank of Korea and the Shinhan bank moved to prevent crypto traders from creating bank accounts, the commissioner of the FSC has now announced all exchanges will face no issues when using and operating banking accounts.
“There exists no issue in banks providing virtual bank accounts to cryptocurrency exchanges. If digital asset trading platforms have KYC and AML systems in place, there is no problem in issuing virtual bank accounts to exchanges,” commissioner Choi said.
Furthermore the commissioner also added the importance of KYC and AML procedures that will remain the standard for any exchange looking to partner with a bank or traditional financial institutions. Also hinting at security for the future, crypto exchanges are assured their links with traditional banks will not be subject to aggressive restrictions as the stance on crypto regularly changes with the FSC, and even Choi Jong-Koo, advising citizens to stay away from investing in crypto.
Many have also drawn comparison to the initial plans outlined by the government as it intended to utilize exchange and bank partnerships to prevent money laundering and other illegal financial activity.
Exchanges in South Korea
The exchange market in South Korea has been blowing up recently, worth over a $1 billion, the country remains a hotbed for crypto users. With a number of crypto exchanges including the likes of Coinone and Gopax being approved by the state the likes of Bithumb and other established exchanges face increased competition as smaller exchanges offer considerably more user choice. Bithumb also lost considerable market share due to its cancellation of partnerships with all banks except Nonghyup. Essentially forcing its users to enroll with Nonghyup many have migrated to smaller exchanges including Gopax for its wider payment options.