SEOUL, 28 Dec. (Yonhap) – The government said on Thursday that it prohibits the use of anonymous virtual accounts in cryptocurrency transactions as part of efforts to curb speculation on virtual currency.
Hong Nam-ki, minister of the Office for the coordination of government policies, made the announcement after a meeting of the deputy ministers of the related ministries, saying that the government “can not let this abnormal situation of speculation continue for longer” .According to the measure, only real bank accounts and corresponding accounts in virtual currencies can be used for deposits and withdrawals, while the issuance of new virtual accounts for cryptocurrency trade will be prohibited, Hong said.
These exchanges will also be banned from issuing virtual accounts to new customers, Hong said.The Financial Intelligence Unit and the Financial Supervision Service will carry out joint inspections to ensure that these real-name operations take root soon, the official said. Cryptocurrencies, such as bitcoin and ethereum, have rapidly gained popularity in recent years. South Korea is home to one of the largest bitcoin exchanges in the world, with an estimated 1 million people owning some of the best known digital coins.
Among the signs of overheating in cryptocurrency speculation, the government has repeatedly warned of the risks associated with trading in virtual currency, saying that virtual currency is not a “legal tender currency whose value is guaranteed by the central bank” and therefore its prices could fluctuate a lot and cause huge losses.
Despite these warnings, Hong said that speculation showed few signs of diminution, with values of many cryptocurrencies excessively higher at home and abroad, and some raise concerns that money flows into the cryptocurrency markets from the manufacturing sectors.
Hong said that the Ministry of Justice even suggested closing cryptocurrency exchanges.The minister said the government will also strengthen local exchange requirements to prevent money laundering and make penalties for virtual currency crimes harsher.The government will also put restrictions on cryptocurrency ads, he said.