|Busan Bank’s logo|
By Anna J. Park
After months of consideration, BNK Busan Bank made the final decision not to form a partnership with local cryptocurrency exchanges, dealing a huge blow to crypto exchanges that had been anticipating the alliance to boost market confidence.
According to industry sources, BNK Busan Bank turned down partnership offers from virtual asset exchanges due to risk factors.
“Despite expectations of brokerage commission fees by signing partnerships with cryptocurrency exchanges, the bank ultimately decided not to sign the deal, due to concerns over various risk factors, including possible money laundering issues,” the bank official said.
At least five local cryptocurrency exchanges ― including GOPAX, GDAC, Huobi Korea, Flybit and Probit ― were in talks with BNK Busan Bank last month over the partnership, in which the bank would have hosted real-name accounts for transactions at the crypto exchanges. The exchanges were hoping that the bank’s decision would bolster their legitimacy, but the rejection appears to have dashed such hopes.
The revision of the nation’s “Act on Reporting and Using Specified Financial Transaction Information” states that cryptocurrency exchanges must officially register their businesses until September 24 in order to get a government license to continue their operations. Since one of the key requirements for registration is to verify users’ real-name bank accounts, it is crucial for these exchanges to form partnerships with banks for their survival.
Out of about 60 exchanges headquartered here, only the 4 major ones, including Upbit, Bithumb, Korbit and Coinone, have met the legal requirement of having their investors use real-name bank accounts for verifiable trading.
If the exchanges continue operating without officially reporting their business after the September deadline, business owners could face up to five years behind bars or a maximum penalty of 50 million won ($45,000).