Major South Korean crypto exchanges, including Upbit, Bithumb and Korbit, will follow Coinone’s lead in banning transfers to non-verified wallets, industry analysts said.
On Wednesday, Coinone announced that it would reject deposits from unverified private wallets starting Jan. 24, 2022, to reduce the risk of money laundering. All Korean exchanges, including Upbit, Bithumb, Korbit and 20 others, are expected to have implemented similar or identical measures as Coinone by or before March 25. The Korean government set the deadline for exchanges to track coin transactions on and off their platforms accurately.
Korean blockchain industry analyst Jun Hyuk Ahn told Cointelegraph, “Korean exchanges are creating their own Travel Rule solutions in order to meet the requirements to operate post-March.”
“All the Korean exchanges are going to have to use some travel rule system by March because that’s when the government has set a deadline for them. Coinone just did it first.”
The rule for exchanges will also help the East Asian nation come into compliance with the Financial Action Task Force (FATF) Travel Rule.
According to Anti-Money Laundering (AML) compliance service Sygna, the Travel Rule stipulates that national governments must “ensure domestic exchanges share real-identity information with transmittal counterparties or face increased AML/CFT monitoring.”
These compliance stipulations for exchanges are part of a long series of regulatory restrictions for crypto exchanges that started with the real-name bank account requirement for all users. Before that rule was…