The commissioner of the Financial Services Commission (FSC) of South Korea is Choi Jong-Ku. He said that, there are no issues regarding the security to provide virtual bank accounts for the local cryptocurrency exchanges.
As long the cryptocurrency platforms are following the rules of the Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, the processes can be easily followed by the government of South Korea. And there are no problems, the platforms will be able to use banking services from the country’s commercial financial institutions.
“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.
In South Korea, the deposit and the withdraw instantly on the exchange platforms are providing by an individual system called, virtual bank account. This system make the whole process more simple and secured.
Investors positive thoughts
In order to lower the possibility of money laundering the government in South Korea encouraged banks to prevent working with cryptocurrency exchanges.
Nonghyup, the biggest bank in South Korea worked with crypto exchanges for more than a year. Until mid-2018, despite the pressure, Nonghyup was still providing services to local exchanges. Commissioner Choi, said that in a public statement from the government, in the following years it won’t be a complication to work with the banking services for the local cryptocurrency exchange platforms.
The early problems related the KYC and AML have been resolved 10 months ago. South Korea Blockchain Association reported this with optimism, towards the newly established stance of the FSC. Local financial authorities and FSC are concerned about the security. Because of their concerns, the country’s largest cryptocurrency exchanges together with the South Korea Blockchain Association are initiating the process of obtaining insurance to protect investor funds.
The government recently approved the biggest cryptocurrency exchange, like Bithumb, Upbit, Gopax, Korbit, Coinone. The reason is: the currencies have sufficient security measures and internal management systems.
KISA, the Ministry of Science and IT, a security analyst, published an article in August. Based on the article lots of the exchanges have weak security and internal management systems integrated into their system. For example: UPbit, Bithumb, Korbit, Coinnest, Coinlink, Coinone, Coinplug and Huobi.
Significant progress in South Korea
The second largest cryptocurrency exchange platform, Bithumb disabled every other banking service on their website, except its partner Nonghyup. After this sudden decision of Bithub, investors were experimented with new cryptocurrencies such as Gopax. If we have a look on this coin, we can find the second largest Bank financing it.
Gopax is supporting deposits and withdrawals for all local banks in South Korea possibly due to the assistance of Shinhan. The number of competitors is constantly increasing with key players. Such as Upbit, Gopax, Coinone, and Korbit taking more market share, providing several alternative options for investors.
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