One of the largest South Korean cryptocurrency exchange, Bithumb, on Wednesday, suspended the registration of virtual accounts. The existing virtual accounts, however, are supporting withdrawal and deposits as usual. The move came after Bithumb could not renew its partnership contract with NH Nonghyup Bank in the stipulated time.
According to the new Korean regulations, cryptocurrency exchanges need to create partnerships with banks, and trading accounts can only be used for exchange only if they are supported by a KYC attested bank account. In short, unidentified virtual accounts cannot be used for cryptocurrency trading in the country anymore.
Recently the exchange came out with the new set of rules where Bithumb partnered with Shinhan Bank. Once the term got over, it planned to team-up with NH Nonghyup Bank. When the contract got over, the exchange tried to renew its partnership but was met with a refusal of the firm.
The bank’s hesitation stems from a current hacking incident that caused Bithumb to lose assets worth $16.88 million. As per the Nonghyup Bank, it has decided not to reintroduce the contract because Bithumb still has difficulties in shielding consumers’ info and stopping money laundering.
The official added that the suspension of virtual account registration was for a short-term, and it might resume soon as both parties reach an agreement on safeguarding customers data.
The official further mentioned that it had an agreement with Nonghyup Bank on the renewal of the contract. At currently it is planning to iron out different views on a few of the legal expressions and begun distributing virtual accounts soon.
As per the news published on BC Focus, on June 20, the exchange had restricted the deposits and withdrawals after millions were stolen in a major hack. For almost a month, Bithumb had inactivated deposits and withdrawals, only the existing users on the platform were allowed to trade cryptocurrencies.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]