Ahead of the’Act on Reporting and Use of Specific Financial Transaction Information (Special Act), which will be enforced in March next year, restructuring is expected to take place in earnest, such as closing large numbers of virtual asset exchanges or joining with large companies. When the Special Money Act is enforced, the use of real-name accounts becomes mandatory because many small and medium-sized exchanges have used corporate accounts, etc. to make non-real-name transactions. The industry estimates that only 10 of the 70 small and medium-sized exchanges will survive. The concentration of cryptocurrency investors on large exchanges is also expected to intensify.
According to the virtual asset industry on the 25th, it is known that some small and medium-sized virtual asset exchanges are in the process of organizing their business. Binance KR, a Korean branch of Binance, a global virtual asset exchange, recently announced an announcement that it will end its service through its website. Binance KR said, “Because of the low trading volume of the BKRW pair, it was difficult to provide smooth transaction liquidity and services to users, so we decided to terminate the exchange service.” The main reason small and medium-sized exchanges are closed is due to the special money law. The key to the amendment to the Special Money Act is to make it mandatory to meet a real name confirmation deposit and withdrawal account. Small and medium-sized exchanges that did not have a real name account have been operating in the form of a’honeycomb account’ in which investments are deposited with one corporate account of the exchange. Honeycomb accounts have inherent risks such as fraud or embezzlement of virtual asset exchanges. For this reason, there have been frequent fraud cases in virtual asset exchanges, such as manipulating coin trading volumes and market prices. It is a method of creating a virtual asset exchange, collecting investors’ funds, and embezzling or fleeing investment funds. The industry expects that the introduction of real-name accounts will enhance the transparency of virtual asset exchanges.
Some small and medium-sized virtual asset exchanges are busy moving to qualify for special law qualifications. Gopax has obtained information security management system (ISMS) certification, and is discussing with four commercial banks. Huobi Korea also revealed that it is in close contact with commercial banks to issue real-name accounts. However, many small and medium-sized criminals are expected to be subject to restructuring.
Even with large virtual asset exchanges, the situation is not easy. It is known that Bithumb, Coinone, and Kobit are preparing or discussing real-name confirmation deposit and withdrawal accounts renewal with commercial banks from January next year. In the industry, since the special payment law is enforced after this contract, it is expected to be a major point in the direction of the domestic virtual asset industry. This is because even large exchanges can no longer conduct business if they fail to renew their contract with the bank. Bithumb and Coinone signed a contract to issue real-name accounts with NH Nonghyup Bank and Kobit with Shinhan Bank. Upbit signed a new contract with K-Bank in June.
Regarding the renewal of contracts, the risk assessment of financial institutions against money laundering is becoming a variable. This is because even if the exchange meets all the requirements for a real name account, the bank finally checks whether money laundering is prevented and gives a real name account. An official in the virtual asset industry was concerned, “If the bank rejects the contract, it may not be issued.”
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