On December the 28th, Reuters published an article about possible upcoming regulations in the South Korean cryptocurrency market. It explained that the South Korean government wants to include a ban on opening anonymous accounts. The information is not well explained and can create misunderstandings.
A Reddit user known as givvy12, that according to what he said, lives in South Korea, has explained and clarified the situation that Reuters couldn’t explain. Businesses are able to open different temporary banks account in order to buy different items online.
How Do Virtual Account Work?
In South Korea, the banking system is different than in the United States in some ways. Reuters was not able to explain to the audience this important differences and has helped to spread FUD across the markets. Bitcoin has lost almost 10 percent yesterday and different webpages have been taking these new regulations as the end of Bitcoin in South Korea. Not even near.
“It is very common for businesses to open temporary bank accounts for customers. These are called ‘virtual bank accounts.’ They are not real or tied to any specific name. ‘Virtual’ (this is important to understand). Often, these bank accounts are open for only 24 hours, and they are anonymous. People can go to the ATM, transfer the exact amount to that account, and pay for items online,” explains givvy12.
Bithumb, one of the most important South Korean exchanges, allow customers to use virtual accounts to deposit Won into their system. When you have this virtual accounts, you have three hours to go to an ATM and send Won to the anonymously generated bank account.
The most important point here is that these cryptocurrency exchanges, Bithumb and Korbit, for example, are serious companies that use to be ahead the regulations. They have been asking the users for private information since before the government expressed its intentions to regulate the cryptocurrency market.
FUD is spreading, but it is always important to understand the reasons behind the different measures. According to this Reddit user, it was more difficult to sign up with Bithumb than with Coinbase, even before any regulation.
For more informations about this, you can read his original reddit post.
image source: ccn