The clampdown in South Korea, a vital source of global demand for cryptocurrency, came as governments and policy makers around the world struggled to regulate an asset whose value has skyrocketed over the last year.
After reports of a national ban on cryptocurrency trading, South Korea’s Financial Services Commission (FSC) have released reports that trading will be legalized from January 30, 2018.
According to the FSC, exchanges must only permit trades from customers whose name matches their bank account. both native and non-native, will not be allowed to trade. Foreign citizens, both native and non-native, will not be allowed to trade.
“Establishment of the system for ‘real name verification of deposit and withdrawal accounts’ for settlement will be completed by January 30, 2018,” the FSC documentation reads.
Six of South Korea’s major banks have already taken action, signing up to implement the required monitoring changes following agreements with the government on inspection of anonymous exchange trading accounts earlier this month.
These include Industrial Bank, Kookmin Bank, Shinhan Bank, Nonghyup Bank, Hana Bank and Gwangju Bank.
Following the law changes, cryptocurrency exchanges are upgrading their systems and requirements for users. Korbit, one of the leading platforms along with Bithumb, suggested opening an account at Shinhan Bank.
“To use the new KRW deposit method, which is slated to be implemented within this month, you must have a Shinhan Bank account registered under your legal name. Please use this time to create a banking account at Shinhan Bank,” a post states.
Seoul has also addressed the issue of taxation on cryptocurrency exchanges, which are now required to pay local income tax and corporation tax for 2017 profits.
After most markets continued to fall slightly this week, the cementing of Korea’s official regulatory position on cryptocurrency should lead to increases over coming days.