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[한국금융신문 한아란 기자]
With the bitcoin price surpassing 40 million won for the first time in Korea, the virtual asset (cryptocurrency) industry is tense ahead of the enforcement of the’Act on Reporting and Use of Specific Financial Transaction Information (Special Act)’ in March. This is because, according to the revised bill of the Enforcement Decree of the Special Money Act, the requirements for reporting as a virtual asset business operator must be met.
In the financial sector, it is believed that the ability of exchanges to prevent money laundering (AML) will be the key to issuing a real name confirmation account (real name account). As exchanges that do not meet the requirements until September next year are on the verge of withdrawal, investors are advised that the exchange’covering the boulders’ is necessary.
According to the financial sector on the 8th, the real-name account contract signed by NH Nonghyup Bank, Bithumb, and Coinone will expire at the end of this month. An official of Nonghyup Bank said, “We are renewing the contract every six months after signing a formal contract on January 31, 2018.” “The contract will expire on the 31st, but if there are no changes, we will renew the contract.” Shinhan Bank is conducting due diligence to decide whether to renew the contract with Kobit. A Shinhan Bank official said, “We will decide whether to extend the contract at the end of this month through due diligence such as AML and security.” K Bank signed a new contract with Upbit in June.
The Special Money Act mandated financial transactions through’real name accounts’ of virtual asset providers (VASP) such as cryptocurrency exchanges. A real name account refers to an account that allows financial transactions only between the account of a virtual asset business operator and a customer account opened in the same financial company. Virtual asset business operators that have been operating since before the enforcement of the Special Payment Act must file a business report to the authorities after receiving a real name account from the bank within 6 months after the enforcement of the Act, that is, by September. Criteria for opening real-name accounts include separate storage of customer deposits, acquisition of information protection management system (ISMS) certification, non-compliance with non-receipt requirements, and separate management of customer transaction details. In addition, the bank identifies, analyzes, and evaluates the risk of money laundering of virtual asset providers.
Currently, there are 4 real-name accounts from banks: Bithumb, Upbit, Coinone, and Kobit. Small and medium-sized exchanges that did not have a real name account have been mainly operated in the form of a’honeycomb account’ in which investments are deposited with the exchange’s own corporate account. However, in the future, if a virtual asset business operator operates a honeycomb account as before and fails to report business, he or she will face imprisonment for up to 5 years or a fine of up to 50 million won. Virtual asset business owners who have not been issued a real name account will no longer be able to conduct business legally.
The industry believes that large-scale restructuring of existing cryptocurrency exchanges is inevitable. In particular, it is predicted that only 5-10 companies will survive among the 70 small and medium-sized exchanges. For this reason, cryptocurrency exchanges are focusing on ISMS certification, AML system construction, and real-name account issuance to meet business requirements. Gopax, Hanbitco, Flybit, Cashierest, and Huobi Korea are in contact with commercial banks to issue real-name accounts.
In the financial sector, real-name account issuance will eventually depend on the AML capabilities of cryptocurrency exchanges. This is because the AML risk assessment is entirely up to the banks, even if the exchanges meet other requirements. An official from a commercial bank said, “There is not yet a clear government guideline, so banks are cautious about actively issuing real-name accounts on cryptocurrency exchanges.” It seems to do,” he said.
There are also observations that for banks seeking to increase their non-interest income, transaction fee revenue through real-name account issuance will be a good new source of revenue. The official said, “As the relevant laws are established and grounds are created, banks will not avoid new sources of revenue,” he added. “In the end, the key will be whether small and medium-sized exchanges can meet the standards of the special law.”
Reporter Han Aran [email protected]