[Photo by Yoo Dae-gil = dbeorlf123@ajunews.com]
SEOUL, Jan. 30 (Aju News) -- Under pressure from financial regulators who want a tight grip on South Korea's fledgling virtual currency market, domestic banks on Tuesday introduced a customer identification system, allowing only real-name accounts used for deposits and withdrawals in cryptocurrency trading.
Six lenders including Shinhan and KB Kookmin applied the real-name system, asking clients to disclose names, addresses, contact numbers, transaction purposes and the source of funds for virtual money trading. Transaction records will be kept.
At all branches, KB Kookmin issued customer instructions on its verification process, saying transactions suspected of money laundering would be immediately reported to financial authorities. The lender warned that if customers provide wrong information or refuse to provide information, transactions would be terminated or rejected.
The new system fueled concerns that banks may refrain from opening new contracts with virtual currency exchanges or convert only existing account holders into real names. Bank officials say they are cautious in making a contract because of onerousness and a possible government lash.
"In a virtual currency market where hundreds of thousands of deposits and withdrawals are running a day, it is too much burden for a bank to check the purpose or source of funds one by one," a bank official said told Aju News.
Financial regulators have threatened to close virtual accounts provided by six banks to cryptocurrency exchanges if they are found to have violated rules related to money laundering. They called for strong steps to prevent the "serious" side effects of irrational and excessive speculative investments as South Korea has become a hotbed for abnormal trading.
Finance Minister Kim Dong-yeon described the shutdown of virtual currency exchanges as "a viable option" and said taxes could be levied on cryptocurrency trading.
reporter
Lim Chang-won
cwlim34@ajunews.com
