The South Korean exchanges Bithumb, Coinone and Korbit confirmed on Sept. 8 that they have secured their bank partnerships, and will be completing their registration with financial authorities soon.
Nonghyup Bank has provided documentation confirming that it would continue providing services for Bithumb and Coinone. Shinhan Bank has provided the same documentation for Korbit.
Bank partnerships are required for exchanges to qualify for registration under the Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC), as required by the Financial Transactions Reports Act (FTRA).
This is because the FTRA requires users to register under their real names and link their personal bank accounts in order to access domestic crypto exchanges.
Before the FTRA, users could register under pseudonyms and deposit cash into an exchange's company account (often called a "hive account" because of its ability to house multiple users) to purchase crypto.
The FTRA registration deadline is Sept. 24.
So far, Upbit is the only Korean exchange to submit their registration. Upbit wrapped up their registration process this past Aug. 20. Upbit revealed on the same day that it had renewed its contract with Kbank.
The remainder of the Big 4 have yet to officially submit their registration to the FIU, but securing their bank contracts was the major hurdle. No stumbling blocks are expected during the rest of their registration proceedings.
Bithumb and Coinone have indicated that they intend to submit their registration by the end of this week. Korbit is expected to follow on their heels.
Last month, Nonghyup requested that Bithumb and Coinone suspend all crypto deposits and withdrawals until they could sufficiently demonstrate their ability to enforce the travel rule. Nonghyup suggested that failure to comply would result in their bank contracts being revoked.
However, Nonghyup has since revised its demands. The condition is that Bithumb and Coinone must demonstrate their ability to comply with the travel rule within 60 days of their FIU registration.
The travel rule requires exchanges to report certain transaction data (such as the sender and receiver's personal information and wallet addresses) to the FIU every time a transaction exceeds 1 million won ($854) in value. This means they need to have the means to collect personal data from users every time such a transaction occurs.
Nonghyup has confirmed that it has extended its contract with the two exchanges for an additional six months. Up until now, banks have renewed contracts every six months.
Shinhan Bank has also extended its contract with Korbit an additional six months.
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