From October, in order to trade virtual currency of 1 million won ($ 840) or more on Upbit, customers will have to go through the KYC identification process. This is a measure taken by the exchange in order to fulfill its obligations to combat money laundering.
In accordance with South Korea’s Special Financial Information Law, virtual currency exchange sites must comply with anti-money laundering requirements.
In particular, this applies to customer identification (KYC). Clause 5-2 Clause 1 of the Special Law states that in the case of transactions of more than 10,000 won, proof of the customer’s identity is required, and clause 4 states that if the user refuses to do so, the transaction is prohibited.
An exchange customer identity verification is a process in which a user takes a photograph of their identification card, such as a resident registration card or driver’s license, and uploads it to the Upbit app, and the exchange verifies the identity through the government’s computer network.
After October 8, it will not be possible to complete a transaction of less than one million won without a customer verification process. Financial regulators are positive about Upbit’s customer confirmation plan. It is expected that the exchange’s customer verification system will be applied to other sites in South Korea. Bithumb, Coinone and Korbit will also go through a similar identification process in the near future. This will most likely happen at the end of the year.
The FSC spokesperson points out that through strict management and supervision of market operators, commitments to combat money laundering will be met and risks to users will be minimized.
Thus, the South Korean authorities are consistently pursuing a policy of tightening requirements for all cryptocurrency exchanges operating in the country. Perhaps some users do not like this, but on the other hand, such actions of the authorities ensure the protection of clients of crypto platforms from the actions of intruders.
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