South Korea To Stop Anonymous Cryptocurrency Trading by 2020
New reports have revealed that the South Korean government has released a new cryptocurrency system for trading that will require crypto users to use their real names and their real identities when conducting cryptocurrency transactions. Currently, users do not need to provide any key details when transacting. The South Korean government revealed that the newly proposed system intends to end the current nature of anonymity by January 2020.
Sources have also come out to claim that the new system is focused on the new cryptosystem and is likely to ban transactions that are made anonymously. Financial authorities have taken a step to prohibit banks from providing virtual accounts needed by the users to sell or buy cryptocurrency. The regulation also restricts underage and foreign investors from applying for crypto accounts. According to Kim Yong-beom—South Korea’s senior financial regulator, six South Korean banks will be issuing brand new trading accounts.
Is it that bad?
While the new system may not be received with warm hands as it is perceived as slightly negative and restrictive, there are countless benefits which the South Korean governments intend to focus on. Lately, there has been numerous attempts and debates doing rounds on cryptocurrency regulations, with a few regulators attempting to regulate the market without keeping in mind all the necessary, comprehensive understanding of critical aspects within the cryptocurrency and blockchain world.
However, multiple articles have backed up the idea of regulating this market including South Korea’s move to regulate the transaction area. With many governments including the government of France and the United States, recognizing cryptocurrency as non-detrimental particularly to the conventional financial systems, debates on regulating the crypto world have mainly centered around alleviating and preventing criminal activities across the globe. South Korea similarly intends to prevent illegal activities by ensuring that crypto users are legitimately recognized. Apart from criminal activity prevention, here are some of the benefits of the new system.
It will enable recognition and legitimization
One of the most significant challenges cryptocurrencies have faced, is being recognized, appreciated, and accepted as a legitimate way of investing in the world. We cannot fail to admit that it has seen massive recognition and legitimation in recent years and the same crypto education is still going on educating other nations that are in the dark. South Korea’s move of allowing users to identify themselves is a significant push of recognizing and legalizing cryptocurrency.
In South Korea, a minor or a foreigner will not be able to transact through cryptocurrency while other citizens must provide legal credentials to send, receive and withdraw cryptocurrency. In any state, anything regulated is fully recognized, accepted and legitimate. Regulating means that all criminal activities like terrorism, money laundering have been barred.
South Korea maintains that they will put a system that will help crack down crypto crimes– A comprehensive investigation revolving around illegal activities associated with the crypto industry. An example of such activities include market manipulation. The culprits will be arrested and punished.
Since the cryptocurrency industry is still growing, there is a need to pave the way for it to grow exponentially without difficulties. However, overregulation will only kill and shatter this dream. Government bodies can create conducive environments for blockchain and cryptocurrency to grow and expand their operations with relative stability and assurance that they will not be disrupted or overcontrolled. However, the current lack of regulatory framework with a robust set of rules and conditions in place make the investment task riskier and dangerous, given the prospects of considerable shifts in taxation in the near future or significant policies.
South Korea has already issued an order to ban banks from offering virtual accounts to crypto users. Minors and foreigners will also not be in a position to open cryptocurrency accounts which builds stability. In as much as investments are highly volatile, crypto’s stability will create room for more investors as they will feel more secure knowing whom they’re investing with and the risks involved.
Reduce fraud and criminal activities
The aim of South Korea’s regulation system is to identify legit crypto traders and reduce potential fraud and other money laundering activities. Only individuals with verified bank accounts which are linked to crypto exchanges will be able to transact. Not everyone has welcomed the crypto craze, and many countries across the world banned bitcoin and other cryptocurrencies in general completely as they virtually believe that it’s a potential source for money laundering and fraud.
However, the South Korean regulation system will excite investors for it will significantly reduce diverse activities and improve acceptance in other countries. Banks will also be held accountable for detecting any money laundering activities, and they will be barred from accepting investments and transactions for individuals who fail to disclose their identities.
The downside: vulnerability implications
Many countries are embracing and adopting the regulatory idea, with a similar goal of curtailing criminal activities. Therefore, it is quite probable that South Korea’s’ rendition “know your customer” move will be used in other crypto countries.
This also means that a lot of personal details like a person’s full names, age, gender, id numbers, place of residence, SSNs and other critical information will be shared and even make circulations around these sites. This will subsequently lead to other criminal activities as the shared details are quite vulnerable.
Corporates and organizations will need to put in place strong preventative and security measures to make sure that their clients receive total protection over their personal details. Another cropping up issue is that cryptocurrency enthusiasts typically enjoy the concept of remaining anonymous. In fact, nobody likes being questioned about their personal information from banks to immigrations and other vital areas.
Not having to provide any name, identification number, social security number or any other detail is unknown-to-many one of the reasons why libertarians have flocked to the bitcoin cryptocurrency world. Getting rid of this typical freedom is biting away the only dangling carrot. However, it is clear that this systems’ benefits surpass the downsides.