Six banks that offer virtual currency accounts to institutions will be inspected to ensure they are following rules, including ensuring real names are used
South Korea has stepped up its clampdown on bitcoin and other cryptocurrencies, announcing joint inspections of six local banks.
The financial regulator’s move is the latest step in the country’s bid to address concern that increasing use of assets like bitcoin could lead to a surge in crime.
The joint inspection by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) will check whether the six banks, which offer virtual currency accounts to institutions, are adhering to rules to prevent money laundering, and using real names for accounts, FSC chairman Choi Jong-ku told a press conference.
“Virtual currency is currently unable to function as a means of payment and it is being used for illegal purposes like money laundering, scams and fraudulent investor operations,” Choi said.
“The side-effects have been severe, leading to hacking problems at the institutions that handle cryptocurrency and an unreasonable spike in speculation.”
The six banks are NH Bank, Industrial Bank of Korea, Shinhan Bank, Kookmin Bank, Woori Bank and Korea Development Bank.
NH Bank and Shinhan Bank representatives declined to comment, while the other banks could not immediately be reached for comment.
Officials were also looking at ways to reduce risks associated with cryptocurrency trading in the country, which could include shutting down institutions that used such currencies, he said.