Who wants peace prepares for war – Since its creation, Bitcoin (BTC) and the regulation are at war. Influences, powers, laws, obligations: all shots are good to prevent the development of the blockchain and its ecosystem. Thereby, BithumbSouth Korean cryptocurrency exchange is set to follow the national legislation. Bithumb adapts to the new laws and forces its users, since January 27, to make a new control identity and to declare their crypto addresses on a whitelist. Explanations!
The Bithumb example: a cryptocurrency platform under the yoke of regulation
Since January 27, Bithumb, a virtual asset exchange, has been requiring its users to complete a new set of identity verification (KYC). Centralized exchanges are however authorized (Binance and Kraken, for example). The use of decentralized exchanges requiring no identity verification, type Metamaskis prohibited.
This anti-cryptocurrency policy is not new. Coin Telegraph explains it to us. In 2018, cryptocurrency accounts were mandatory linked to a bank account. Then, in September 2021, the institutions of the country began a major project of verification of the management system internet security cryptocurrency exchanges. Cryptocurrency platforms are only entitled ton only banking partner. In the case of our example, Bithumb’s partner is the Nonghuyp Bank.
Bithumb is not isolated. The other 3 South Korean platforms, Coinone, Upbit and Korbithave had to adapt to these new obligations.
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Bitcoin and cryptocurrencies in the sights of regulation
South Korean legislation follows a international guidelines in virtual asset policy. Covered, it adapts to the travel rule, a standard in terms of crypto-economy proposed by the Financial Action Task Force (FATF). The measures that make up the travel rule ensure the security and the traceability funds transferred from one identity to another.
The travel rule
- The national currency is associated with pair trading.
- Each identity must be associated with a traditional bank account.
In practice, the consequences of this cryptocurrency regulation policy are delicate. Bithumb, in its press release, explains and is forced to modify its virtual asset withdrawal policy. The implementation of these new functionalities even led to a suspension of services of the platform between January 24 and January 27. Withdrawals were impossible. The Korean Financial Intelligence Unit (KoFIU) registers, on a white list, the address of the digital wallets in order to ensure traceability of the identity.
Cryptocurrencies, the target to ban
Failure to comply with these rules leads to increased vigilance in the fight against money laundering and the terrorism. South Korea wants to adapt its legislation. Crypto-economic players have until March 25, 2022 to join the ranks.
Coin Telegraph points out that the implementation of this policy in the case of Bithumb did not not made without pressure. The nonghuyp bankimportant in South Korea, does not hesitate to threatento forbid cryptocurrencies. Asset exchange platforms would then shoot themselves in the foot by not complying with the new legislation.
The South Korea is therefore good soldier in terms of regulation. Its neighbor, the Chinaworks according to a system ofcentralized state exchange. L’Indonesia prohibits cryptocurrencies. The examples of battles are many, and blockchain technology seems to be resisting in pain. Regulators are scrambling and gaining ground, but their enemies do not let themselves be defeated.
Right now, it’s shooting live ammunition on some exchanges and regulators are no longer joking. All the more reason to choose a platform that does not suffer this wrath, like FTX. Do not wait any longer, register on this reference platformand enjoy a lifetime discount on your trading fees (affiliate link, see conditions on site).