Home News Seoul Government Bans Banks from Dealing in Cryptocurrencies

Seoul Government Bans Banks from Dealing in Cryptocurrencies

December 14, 2017 16:23
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In the latest development, the government in South Korea has imposed a ban on banks from activities involving cryptocurrencies. The move has prompted all major banks in the country to stop issuing accounts required for crypto trading. This has affected all the major bitcoin exchanges including the Bithumb, Coinone, and Korbit.

The government has been daily holding meetings with different stakeholder to discuss cryptocurrency regulations. A local publication of South Korea has reported the move from the regulators. According to AFP: “The Prime Minister’s Office said Seoul would ban financial institutions from dealing in virtual currencies – including buying, possessing, or holding them as collateral.”

In addition, the regulators have also restricted minors and foreigners from cryptocurrency trading and opening bank accounts in the country. As per reported in Korea Herald, “banks in Korea that provide virtual bank accounts for cryptocurrency trades will have to verify the identification of account holders when creating new ones.

Trading cryptocurrency in South Korea requires virtual bank account that is provided by the traditional banks which facilitates deposit of money into it. All major Korean exchange requires their customers to go through the process. But after the government’s decision, all major banks have stopped issuing new virtual accounts for cryptocurrency trading with some are also suspending the existing accounts. South Korea has already banned ICO and Bitcoin futures in the country.

Earlier today, while Fed chair Janet Yellen announcing rate hike decision, she said, Fed will not allow banks to take exposure in these highly speculative and fluctuating cryptocurrencies which will be a threat to the financial system.

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