Recent reports revealed that the South Korean government is creating a new system for cryptocurrency trading which will enforce users to use their real-name identities when conducting crypto transactions. Currently, cryptocurrency is known for its anonymous nature. However, the newly proposed system from South Korean authorities could end this practice as early as January 2020.
Last week, the South Korean government announced that they intend to implement a system of cryptocurrency trading which will enforce the practice of using real-name identities, and which will in turn limit speculation surrounding the industry.
According to the local media outlet, Yonhap, sources knowledgeable with the proposed system suggested it is likely to ban anonymous accounts and will become active in January 2020.
Currently, South Koreans trade cryptocurrencies anonymously using virtual accounts. The virtual accounts are issued by certain South Korean banks, which cryptocurrency exchange platforms use to link to the actual traders. However, according to South Korean regulating authorities, this practice aids in enhancing cryptocurrencies’ speculative nature, while also creating an opaque financial environment, especially where transactions are concerned. A few days ago, South Korean banks ended this practice by refusing to issue any more virtual accounts for cryptocurrency trading, and all exchanges have been compliant with new policy changes.
The South Korean government maintains that the new system will go a long way in obliterating the nefarious activities associated with cryptocurrencies, such as money laundering and terrorist funding. In addition, the government argues, this move will strengthen the position of banks. Traditional financial institutions have been urged to report any suspicious activity considered to be connected with cryptocurrency trading to the South Korean authorities. Also, banks have been ordered to refuse services to exchange platforms that are not compliant with government policies.
The South Korean government also announced that they would put a system in place to crackdown on crypto crimes during this year. The crackdown will involve a comprehensive investigation regarding illegal acts associated with the crypto industry such as market manipulation. Offenders will be arrested and prosecuted.
These announcements were made last week during the Korean National Economic Advisory Council, which was presided over several government officials, including the Minister of Strategy and Finance, Kim Dong-Yeon, as well as the country’s president, President Moon Jae-in.
During the meeting, the National Police Agency confirmed that they intend to enhance efforts to crackdown on illegal crypto activity. Also, the local police, together with the Korea Customs Service, have been tasked with launching an investigation regarding all Foreign Exchange Transactions Act violations.