Tuesday, May 22, 2018
Korean Smaller Cryptocurrency Exchanges Face Suspending the Trades
Due to Reluctance of Banks
Korean Smaller Cryptocurrency Exchanges Face Suspending the Trades
  • By Yoon Yung Sil
  • February 7, 2018, 00:30
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South Korean cryptocurrency exchange Coinpia halt trading from as Feb. 6 as banks are reluctant to issue a new cryptocurrency accounts.
South Korean cryptocurrency exchange Coinpia halt trading from as Feb. 6 as banks are reluctant to issue a new cryptocurrency accounts.

 

As banks continue to be reluctant to issue a new cryptocurrency accounts, a South Korean cryptocurrency exchange, which failed to open a digital currency account, has decided to suspend its transactions on its platform.

According to industry sources, South Korean cryptocurrency exchange Coinpia halt trading from as Feb. 6 as it put up a notice on its website last month stating that it would suspend transactions from the 6th when it cannot make Korean won deposits. An official from Coinpia said, “We will decide how long the suspension will last depending on an agreement with banks in the future. There are no banks that are willing to issue a virtual currency account for now.”

After the new real-name account system for South Korean virtual currency exchanges went into effect from Jan. 30, there are only four cryptocurrency exchanges that were issued a virtual account from banks – Upbit, Bithumb, Korbit and Coinone. Exchanges other than these four cannot make Korean won deposits so they now receive funds from investors through their corporate accounts.

Financial authorities have been announcing that they would not prevent banks from issuing a new real-name account but banks are refusing to issue one to exchanges except for the four. Other cryptocurrency exchanges, including Coinpia, Coinplug and Eya Labs, have used virtual accounts and failed to sign the contract with banks. Coinplug recently announced that it has suspended some services, such as Korean won deposits and conversion of their credit card reward points to bitcoins. Eya Labs also halted transactions of its virtual accounts. An official from Eya Labs said, “The authorities have to show a clear direction but neither the authorities nor banks don’t tell us clearly. We might also need to shut down if need be.”

The Korea Blockchain Association, a group of major cryptocurrency exchanges, hasn’t also come up with a clear countermeasure. However, an official from the Korea Blockchain Association said, “We are seeking out ways to solve problems by launching a self-regulation commission and imposing duty to prevent money laundering.”