A large amount of the South Korean population is actively trading Cryptocurrencies and the government is concerned about it. Last week, they raided most of the major banks and exchanges in the country. A new rule was announced today making it mandatory for real-name registration for Crypto Traders.
The Justice Minister announced a Bill to completely ban cryptocurrencies which received a huge Backlash, both from people and other government agencies last week. Banks were raided to make sure they did enough to prevent money being laundered through cryptocurrencies. Exchanges on the other hand were raided to make sure they took enough steps to follow proper KYC procedures.
The latest regulation announced today requires real-name registration system to be implemented by Jan 30. Investors involved in Cryptocurrency trading with virtual bank accounts will have to convert it to real-name bank accounts. This process will require the user to make a visit to the bank with their Government issued ID and get their account verified. Also, only users of the six major banks are eligible for trading on Cryptocurrency exchanges.
It is estimated that South Korea accounts for 30% of the total global trade. There’s a lot of demand for cryptocurrencies there that most of the coins are being sold at a premium of 20-30% more than the global average.
Real-Name implementation can make sure money is not being laundered out of South Korea using Cryptocurrencies. Also, it will make it easy for the government to track Cryptocurrency profits and tax them effetely. The South Korean Government said early this week that they’re planning to collect up to 24% in taxes on Cryptocurrency Profits.