According to the Korea Herald report, South Korea’s NH NongHyup Bank, which issues real-name accounts for two major cryptocurrency exchanges here – Bithumb and Coinone – asked them to halt deposit and withdrawal services until they adopt stronger money laundering regulations. The commercial bank has reportedly requested the two exchanges to quicken their pace in adopting the FATF’s Travel Rule.
South Korea has made it mandatory for exchanges to implement the travel rule.
The travel rule is a global standard that requires crypto exchange service providers to share users’ identities involved in any virtual asset transfers over 1 million won ($884). The rule is imposed by the Financial Action Task Force, an intergovernmental anti-money laundering watchdog, and virtual asset service providers include cryptocurrency exchanges and digital wallet providers. The rule is reflected in Korea’s cryptocurrency law, officially called the Act on Reporting and Using Specified Financial Transaction Information. The financial authorities are currently giving local exchanges room to build related systems, but the grace period ends March 25, 2022.
NH NongHyup agreed to extend its current partnership with the two exchanges by three months.
NH NongHyup recently agreed to extend its current partnership with the two crypto exchanges by three months until September 24, the deadline. A Bithumb official said that the request means to stop crypto transfers between cryptocurrency exchanges that expressed concerns that its customers would be charged more transaction fees. The official explained that because of NH NongHyup’s request, its customers would have to withdraw the money in Korean won and purchase coins from another exchange if they want to “transfer” their assets.