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Investments at registered cryptocurrency exchanges can be protected: regulator

All News 14:43 May 26, 2021

SEOUL, May 26 (Yonhap) -- Money deposited at cryptocurrency exchanges that are registered with the government can be protected, but investors would not be protected against price fluctuations, the head of the financial regulator said Wednesday.

Eun Sung-soo, chairman of the Financial Services Commission (FSC), called for cryptocurrency investors to move their money to "safer" exchanges.

Eun made the remarks as the FSC will enforce a revised law from September that requires cryptocurrency exchanges to register with the regulator under strict requirements.

FSC Chairman Eun Sung-soo speaks at a fintech conference on May 26, 2021. (Yonhap)

The revised law, which went into effect in March with a six-month grace period, requires banks to issue real-name accounts under stricter guidelines to prevent money laundering. Under the rule, banks will assess a cryptocurrency exchange's transparency, business risks and the possibility of criminal activity.

The law makes it impossible for a cryptocurrency exchange to withdraw an investor's money without the investor's consent, Eun said.

Currently, only the four biggest exchanges -- Bithumb, Upbit, Coinone and Korbit -- have real-name bank accounts issued by commercial banks, including Shinhan Bank and NH Nonghyup Bank.

Minor cryptocurrency exchanges, which are estimated to number around 100, have been using opaque accounts to lure investors. Such accounts enable cryptocurrency exchanges to manage investors' money with their corporate bank accounts.

From September 25, minor cryptocurrency exchanges will be banned from withdrawing money for cryptocurrency trading if they have no real-name bank accounts.


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