According to a recent announcement, South Korean crypto exchange Bithumb will no longer allow unverified wallets to make withdrawals. This is due to the ‘Travel Rule’ that the South Korean government recently implemented on the various crypto exchanges in the country. The official announcement occurred on January 24 in a blog post.
Starting Thursday, January 27, the crypto exchange has stopped allowing customers to register an account or withdraw their funds using wallets similar to MetaMask because they’re anonymous. According to CoinDesk Korea, anonymous wallets aren’t associated with a number, name, or registered email.
Due to the Financial Action Task Force’s new regulation, exchanges are now required to submit a document showcasing their transactions when they surpass a specified threshold. Bithumb initially said last week that users with anonymous wallets would need to undergo a face-to-face interview before successfully registering an account on the exchange. However, the platform changed its mind after receiving pressure from government officials.
Bithumb and Coinone are the first two crypto exchanges to gather users’ personal information. Other companies operating in the state still have until March 25, 2022, to start implementing the new policy. Now that financial institutions are involved in this new rule, they’re tasked to keep track of the various users making crypto transactions.
The South Korean government hopes that this decision will significantly decrease the chances of illegal activity since only legitimate users and companies would be left using the exchange.