3 South Korean Banks Say They Won’t Deal with ‘Risky’ Crypto Exchanges
Three of South Korea’s five biggest banks, Woori, Kookmin (KB), and KEB Hana, have said they do not want to work with crypto exchanges, claiming the sector is “too risky” – a decision that may well jeopardize the future of even the country’s major exchanges. (Updated at UTC 18:43 to add comment from Flybit)
Cryptonews.com approached a number of South Korean exchanges for comment, but some trading platforms in the country appeared reluctant to speak on the matter.
Flybit, one of the largest crypto exchanges in South Korea outside the “big four,” told Cryptonews.com,
“As the [South Korean] financial sector is currently focusing on its duty to prevent financial accidents and fight money laundering, Flybit will strive to obtain real-name deposit and withdrawal [banking services] by responsibly abiding by the heightened anti-money laundering obligations and security measures.”
Another exchange official, who asked for their platform not to be named, said,
“We’re still in talks with certain banks – this isn’t industry-wide. Or at least not yet.”
As reported last week, banks have been effectively given the role of judge, jury, and executioner over the South Korean exchange sector – with the government telling them to conduct their own risk assessment checks on exchanges. This has led banking chiefs to create their own almost-90-item-strong checklist.
Exchanges without banking contracts will be forced to close or face prosecution under rules that promulgated last month, with a grace period ending on September 24.
But per the news agency Yonhap, Woori, Hana, and KB (none of which currently work with crypto exchange partners) have decided that working with exchanges will be far more trouble than it is worth – particularly, perhaps, as the regulatory scene appears so changeable in South Korea.
The media outlet quoted a senior KB official as stating:
“We may choose to work with [crypto exchanges] someday. But for now, as there is the risk of being involved in crime such as money laundering, it is becoming difficult for us to [become] involved. We are not currently considering [working with exchanges].”
Woori, meanwhile, told the same news agency that “other financial institutions may have similar thoughts” and added that the risk of “hacking and money laundering” outweighed the allure of the profits the bank may stand to make were it to partner with a crypto trading platform.
Rivals Nonghyup and Shinhan are yet to make their own stances clear: The former currently works with exchange partners. There was also no word from K-Bank, the neobank that has partnered with the Upbit exchange.
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Learn more:
– Bank Risk Assessment May Threaten Bithumb, South Korean Crypto Exchanges
– South Korean Government Continues to Scale Back Anti-Crypto Rhetoric
– UK Banks Getting Tough on Bitcoin, But AML Rules Are The Real Problem
– With Banks Turning to Bitcoin, Is It Finally Time to Long the Bankers?
