With the third world largest cyber money market in the world and around 3 million people who piled into cryptos, South Korean authorities have been trying to tackle it for months amid growing fears over the speculative bubble. Since today, January 30, the country starts the real-name trading system for the virtual money.
Tying Up On Anonymity
According to Yonhap, Korean banks no longer can register anonymous accounts and employ them in remittances. The new system requires the financial institutions to use only real-name accounts which will match the accounts on crypto exchanges.
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Some may consider this as an attempt to turn down one of the leading crypto advantages – relative anonymity. But what the Korean government is trying to do is to avert the use of cryptos for illicit purposes, like tax evasion, money laundering, terrorism supply and the purchase of prohibited items.
The other reason for the anonymity ban is the soaring concern over cyber money bubble, which may go off at any time. In general, this system has been implemented in the frames of the country’s gauges on tying up uncertain investment in cyber assets.
It is essential the emphasize that by now six South Korean banks have implemented the system which guarantees the real-name accounts opening, so since today, they are checking people’s IDs in case they want to invest in virtual coins.
Before, for nearly a month, no institutions were allowed to register new crypto accounts as they could not ensure proper verification. Until now, minors, as well as citizens of other countries, are not allowed to open cyber accounts in South Korea.
New Life For Exchanges?
If the life of banks has not changed much with the installation of the real-name trading system on cryptos, it is all different for crypto trading platforms. From today they have to provide banks with clients’ transactions information. The risk is that the authorities may use this as an opportunity to start imposing taxes on virtual money exchanges.
Another problem is that crypto exchanges remain poorly controlled in the country. Neither are they acknowledged as financial products by the Korean government, nor are crypto investors protected by any policies.
As South Korean news agency stressed out, some crypto traders, as well as platforms, forecasted that the prices of cryptocurrencies would go down after banks permit the registration of different accounts.
The others predicted that the prices would change later. This all is happening against the background that only four South Korean major trading platforms (Korbit, Bithumb, Coinone, and Upbit) have the chances to engage new investors as such financial institutions as bank are anticipated to decline transactions with insignificant trading platforms.
At the moment of writing, the majority of top-100 Coinmarketcap.com cryptocurrencies are sunk in red, demonstrating a decline by 7-15% on average. For instance, within the past 24 hours bitcoin lost in price as much as 7% and is traded at about $10,500. In the meantime, stellar, cardano and NEM have plunged by 10%. However, the downward tendency on the crypto market has been prevalent within the last few days.
Table Source: Coinmarketcap.com