Ban on incognito bitcoin accounts goes into effect

The government’s ban on anonymous accounts in cryptocurrency transactions went into effect on Monday and will likely limit the influx of new investors until later in the month.

The ban is part of follow-up measures after the government announced a set of new regulations last week to curb transactions of cryptocurrencies, including a possible closure of cryptocurrency exchanges if necessary, amid growing fears that a bubble in the industry might soon burst.

Under the measure, only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals, while the issuance of new virtual accounts to cryptocurrency exchanges will be banned.

The latest measure will allow people to withdraw money from their real-name accounts through outside banks, but ban deposits at outside banks, according to the sources.

It will take about a month before banks fully adopt the measure.

Such measures will likely encourage cryptocurrency investors to create real-name accounts and curb a frenzy of speculative investment on cryptocurrencies, the sources said.

The government will also strengthen requirements of local exchanges to prevent money laundering and toughen punishments for crimes related to virtual currencies.

Cryptocurrencies like bitcoin and Ethereum have rapidly gained popularity among Korean investors hoping to make quick money.

The country is home to one of the world’s biggest private bitcoin exchanges, with about a million people estimated to have investments in the coin.

Despite a boom in cryptocurrency transactions, their exchanges go largely unregulated in Korea because they are not recognized as financial products and there are no investor protections. YONHAP