The South Korean cryptocurrency exchange Upbit has announced restrictions for users who have not passed verification with the subsequent termination of service.
Thus, from October 6, 2021, customers who do not have a bank account with a real name will not be able to withdraw fiat funds and trade in pairs with South Korean won. Moreover, for those who are in the verification process, the limit will be 1 million won (~$848) at a time. In addition, exchange users must have registered accounts with the K-Bank partner bank.
Starting from October 13, Upbit will suspend the functions of making deposits, trading and withdrawing funds for unverified customers. After passing the identity check through the bank, the exchange will resume service.
The first of South Korean exchanges to receive regulatory approval
All new users after September 6 will be able to carry out any operations only if they have registered accounts.
Upbit is the first of South Korean exchanges to receive regulatory approval. On August 20, the company submitted a Financial Action Task Force (FATF) compliance report to the Financial Services Commission (FSC).
The deadline for accepting documents was set by the regulator on September 24. Local experts assumed that due to the requirements of the FSC about 40 of the more than 60 exchanges in the country would close.
“Big four” exception
According to the media, 37 out of 66 local crypto trading platforms have submitted documents for registration. Experts admitted that the absolute majority of them will not be able to comply with the new rules. With the exception of the “big four”: Upbit, Bithumb, Coinone and Korbit. These platforms have not been able to establish relationships with banks to use registered accounts, they noted.
Previously in March 2020, the Korean parliament adopted amendments to legislation obliging Bitcoin exchanges to comply with financial reporting requirements, KYC rules and information security standards.
Recall that in the first quarter of 2021, the country’s banks processed transactions on verified accounts related to cryptocurrencies in the amount of 64.2 trillion won (~$57.9 billion). The volume exceeded the indicator for the whole of 2020.