South Korean banks will limit their crypto services to unverified crypto traders, following a request from the country’s financial regulators.
According to local media, exchanges in the area that have not identified themselves with a bank account under the ‘real-name system’ framework will only be able to withdraw funds and not to make deposits.
Only four major crypto companies in the country – Upbit, Bithumb, Coinone, and Korbit – have so far complied with the regulations set out in January, which means that many are now left with limited capabilities.
This came amidst reports of major illegal cryptocurrency trading in the country at the start of the year, with around $600 million in transactions discovered by South Korea’s customs service. Two-thirds of these were related to the use of crypto to circumvent foreign currency exchange rules.
Traders that have not adapted to the new rules are reportedly spending funds deposited before they were implemented to fund day to day operations.
Meanwhile, Bithumb has cut its own withdrawal limit to 10 percent for users with unverified accounts, and Upbit gave users with verified accounts 100 million Korean won between them.
Citizens in South Korea have been supportive of crypto, with recent research revealing that fifteen percent of enthusiasts in the country saying they would like to receive their wages in crypto rather than fiat.
It was revealed back in April that South Korea’s capital, Seoul, planned to launch its own S-Coin crypto to be used in a city-funded social benefits program.