Home News Bithumb to block crypto withdrawals to unverified private wallets

Bithumb to block crypto withdrawals to unverified private wallets

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Bithumb, a South Korean crypto exchange, would no longer enable users to withdraw cryptocurrency to unconfirmed private wallets as of January 27.

The exchange said on January 24 that it would become the second of the country’s four major exchanges to prohibit withdrawals to unconfirmed wallets. Upbit and Korbit are the other major exchanges, and Coinone imposed a similar restriction late last month.

Users can now only register their own personal wallets under the new regulation. Users must complete a battery of additional know-your-customer identity verifications in order to complete the registration procedure.

Withdrawals to any domestic centralised exchange, as well as overseas centralised exchanges with a strict KYC process, like Kraken, Bitstamp, Blockchain.com, Bybit, and Binance.US, still generally approved.

According to Money Today, the exchange faced pressure to amend its policy by its partner bank, Nonghyup Bank. In order to comply with the FATF Travel Rule. The purpose of the Travel Rule is to provide financial institutions with information on the senders and receivers of cross-border funds.

The bank “insisted” that the exchange “stop all personal wallets without their own KYC mechanism”. MetaMask and MyEtherWallet are two such wallets.

Domestic partner bank that provides real-name bank accounts is a requirement

Every South Korean crypto exchange that allows trading pairs in the Korean Won (KRW) is required to have a domestic partner bank that provides real-name bank accounts to its consumers. As with Nonghyup to Bithumb and Coinone, a partner bank might have a significant influence on the exchange’s rules.

Real-name bank accounts verify that the person accepting fiat withdrawals from an exchange is also trading cryptocurrency on the platform. This policy aids exchanges in complying with the Travel Rule before the March 25 date.

Upbit and Korbit, two cryptocurrency exchanges, have yet to make any adjustments to their policies regarding personal crypto wallets. When the Korean government deems it necessary for all exchanges to adopt such regulations. Exchanges will be compelled to establish those policies by March 25.

Upbit handles around 76% of domestic trading volume, according to Statista, while Bithumb handles about 13%.

If you don’t follow the Travel Rule, you could face enhanced anti-money laundering and counter-terrorism financing (AML/CTF) scrutiny.

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