South Korean Crypto Exchanges To Follow Coinone in Banning Unverified Wallets

On December 29th, South Korean-based crypto exchange Coinone announced plans to ban all unverified 3rd party wallet addresses. According to several reports, this is to comply with government and FATF guidelines. According to reports, the rest of over 20 South Korea-based crypto exchanges must follow a similar course by March 25th, 2022. South Korea’s interest in crypto is slowly leading to a rise in a proper legal framework. 

Coinone to Ban Unverified 3rd Party Addresses

On Monday 29th, Coinone announced plans to start verifying 3rd party crypto wallet addresses. According to them, they intend to adhere to the government directives and FATF guidelines to curb money laundering.  

Coinone announced that the process would start as early as December 30th and run till January 23rd. Immediately on the 24th, Coinone exchange will not accept any trades connected to unverified crypto wallet addresses. They will ban any addresses not verified by 23rd January. 

According to several sources, this new rule will affect online and hardware wallet holders like Ledger. Anyone who does not want to verify their wallets can just withdraw their funds as early as now. 

Coinone is just the first of the many crypto exchanges which will do the same in the next few months. According to multiple sources, over 20 other crypto exchanges, including Korbit, Bithumb, and Upbit, are expected to follow a similar course soon. 

All Exchanges Will Adhere to Government Directives

South Korean exchanges are expected to ban unverified exchanges in adherence to government guidelines and directives. According to multiple publications, the government set March 25th 2022as the deadline for verifying wallets. After the deadline, any unverified wallets will not deposit or withdraw funds. 

Jun Hyuk Ahn, a Korean Blockchain analyst said:

“All the Korean exchanges are going to have to use some travel rule system by March because that’s when the government has set a deadline for them. Coinone just did it first.”

The government directive compelled local crypto exchanges to get real names, accounts, and ISMS verification systems for all crypto wallets. The ISMS verification has been a requirement since September 2021 in Korea.  

These regulations are designed to curb the issue of money laundering in the country. Earlier, the government had tracked around 33 people who completed illegal transactions worth over $1.48 billion.

If exchanges do not comply with the directive, they will be banned from the country. Hence, it’s much likely that all exchanges will do the same in the next few weeks.  

South Korea Crypto Regulations

Since early 2018, the Korean government has been trying to find ways to regulate crypto. However, since early 2020, they have managed to design policies that give space for crypto existence. 

For instance, the government began working with banks to monitor all crypto transactions. The recent move on banning unverified transactions will go a long way in curbing money laundering.