S Korea will officially prohibit cryptocurrency traders from using anonymous bank accounts

SEOUL: South Korea will ban the use of anonymous bank accounts in cryptocurrency trading from Jan 30, regulators said yesterday in a widely telegraphed move designed to stop virtual coins from being used for money laundering and other crimes.

The measure comes on top of stepped up efforts by Seoul to temper South Koreans’ obsession with cryptocurrencies. Everyone from housewives to college students and office workers have rushed to trade the market despite warnings from global policymakers about investing in an asset that lacks broad regulatory oversight.

The bitcoin price in South Korea extended loss following the latest regulatory announcement, down 3.34 per cent at US$12,699 as of 0409 GMT, according to Bithumb, the country’s second-largest virtual currency exchange.

Bitcoin slumped nearly 20 per cent last week to a four-week low on the Luxembourg-based Bitstamp exchange, pressured by worries over a possible ban on trading the virtual asset in South Korean exchanges.

In Tuesday afternoon trade, it was up 5.4 per cent at US$10,925.

Policy makers around the world are calling for tougher, coordinated regulation of cryptocurrency trading. South Korea’s chief financial regulator last week said the government may consider shutting down domestic virtual currency exchanges.

South Korea’s Presidential office has clarified that an outright ban on trading on the virtual currency exchanges is only one of the steps being considered, and not a measure that has been finalized.

“The government is still discussing whether an outright ban is needed or not, internally,” a government official who declined to be named said after Tuesday’s briefing.

Over the past month, government statements have underscored differences between the Justice Ministry, which has pushed for a more hardline approach, and regulators who have shown a reluctance to enforce an outright ban. — Reuters