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Number of cryptocurrency exchanges rises in S. Korea amid lack of regulations

All Headlines 11:04 June 20, 2019

SEOUL, June 20 (Yonhap) -- The number of cryptocurrency exchanges in South Korea has risen amid a lack of regulations to prevent investors from trading virtual coins with opaque accounts, industry data showed Thursday.

In May, the number of cryptocurrency exchanges stood at 205 in South Korea, although the frenzied buying seen in January last year has been fizzling, according to the data.

The rise comes as minor cryptocurrency exchanges have been using opaque accounts, called "beehive accounts" here, to lure investors. Such accounts enable cryptocurrency exchanges to manage investors' money with their corporate bank accounts.

Number of cryptocurrency exchanges rises in S. Korea amid lack of regulations - 1

In January last year, South Korea began a real-name trading system for cryptocurrencies, banning the use of anonymous bank accounts in transactions to prevent virtual coins being used for money laundering and other illegal activities.

But such opaque accounts allow investors to buy or sell cryptocurrencies by circumventing the real-name trading system.

The government had proposed a guideline to ban such accounts, but a court ruled that it was inappropriate for the government to order cryptocurrency exchanges to shut down their corporate accounts.

While the nation's fever for cryptocurrency trading has fallen off, cryptocurrency exchanges have become more vulnerable to cyber attacks and fraud.

Last year, Bithumb, the nation's biggest cryptocurrency exchange, said it lost 35 billion won (US$29 million) worth of cryptocurrencies in a hacking attack.

Rep. Je Youn-kyung of the Democratic Party has proposed a bill to tighten online security rules for all cryptocurrency exchanges, but that bill is pending in the National Assembly.
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