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S Korea’s Bithumb Runs into Banking Trouble

Tim Alper
Last updated: | 1 min read

Bithumb, one of South Korea’s largest cryptocurrency exchanges, has “temporarily” stopped accepting applications for new authenticated accounts in its home country, as it failed to agree with its bank.

Source: iStock/georgeclerk

The exchange has been working with Nonghyup Bank (NH Bank) to provide real-name cash withdrawals since earlier this year.
In January, Seoul introduced guidelines for banks that deal with exchanges, requiring that all exchange-linked accounts be authenticated using customers’ real names and social security numbers. Six of South Korea’s largest banks – including NH Bank – have voluntarily accepted the guidelines.

NH Bank had struck a deal with Bithumb, which expired on July 31. However, the two parties were unable to agree a contract extension, meaning that, as of August 1, Bithumb has found itself unable to open new authenticated accounts.

Per media outlet KBS, the exchange says that existing customers will be able to continue making transactions via NH Bank as usual for “a grace period of one month.” However, the outlet reports, if the parties cannot resolve their issues after a month, all existing authenticated Bithumb customer exchange-bank transactions may be suspended.

KBS reports that NH Bank has requested improved financial terms after the exchange was hacked in June, losing some USD 17 million.

NH Bank has experienced no such problems with Bithumb rival Coinone, which has recently renewed its banking contract. Meanwhile, fellow market leader Upbit has recently inked a new real-name banking agreement with IBK Bank, with Korbit agreeing terms with Shinhan Bank.

Newspaper Segye Ilbo quotes a Bithumb spokesperson as saying, “We will make efforts to alleviate customer inconvenience by negotiating [a banking deal] as soon as possible.”