Major Commercial Banks Refuse to Issue Exchange Accounts Over Crime and Accident Concerns

KB, Hana, and Woori Financial to Stop Issuing Accounts
Shinhan, Nonghyup Bank, and K Bank Begin Verification After Opening Accounts
Concerns Over Spillover If Money Laundering or Financial Accidents Occur

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-seop] Major domestic commercial banks have decided not to provide real-name verification accounts to cryptocurrency exchanges. Despite the benefits of securing accounts and earning fees, they judged that if money laundering, hacking, financial accidents, or crimes occur, the banks could be held liable.

According to the financial industry on the 23rd, KB, Hana, and Woori Financial Group have settled on not signing contracts to issue real-name deposit and withdrawal accounts to exchanges. Currently, Shinhan Bank, NH Nonghyup Bank, and K Bank, which have opened real-name accounts for cryptocurrency exchanges, are also known to have begun thorough verification by requiring exchanges to improve their anti-money laundering organizations and systems.

According to the Specific Financial Transactions Information Act, which began in March, cryptocurrency operators must establish anti-money laundering systems and connect deposit and withdrawal accounts that can verify customer real names through banks by September. Banks decide whether to issue accounts after independently evaluating the anti-money laundering risk, safety, and soundness of the respective exchanges.

The reason major banks are negative about issuing accounts is due to risk. If crimes such as money laundering or financial accidents occur at exchanges where accounts have been opened, there is a possibility that responsibility could be shifted to the banks. There is concern that controversy may spread among investors, suggesting that banks are also responsible for inadequate verification.

If indirectly involved in money laundering, there is a risk of international sanctions in severe cases. Depending on decisions by other countries, overseas branches’ operations could be suspended, making it difficult to participate hastily.

Another obstacle is that the heads of the government and financial authorities are negative about the cryptocurrency craze and whether to recognize it as an asset. Financial Services Commission Chairman Eun Sung-soo stated at the National Assembly last month, “The biggest concern is that if (cryptocurrency) is formalized and brought into the system, a speculative frenzy could occur,” and added, “Honestly, I hope (investors) do not get involved.”

This content was produced with the assistance of AI translation services.