Bitcoin exchange Upbit to stop serving unverified users

Bitcoin exchange Upbit to stop serving unverified users

South Korean cryptocurrency exchange Upbit has announced restrictions for non-verified users, followed by termination of service.

From 6 October 2021, customers who do not have a bank account with a real name will not be able to withdraw fiat funds or trade in voon pairs. For those in the verification process, the limit will be 1 million won (~$848) at a time.

Exchange users must have nominee accounts with partner bank K-Bank.

As of October 13, Upbit will suspend deposit, trade and withdrawal functions for unverified customers. After undergoing identity verification through the bank, the exchange will resume services.

All new users after September 6 will only be able to make any transactions with named accounts.

Upbit is the first South Korean exchange to receive regulatory approval. The company submitted its FATF compliance report to the Financial Services Commission (FSC) on August 20.

The regulator set the deadline for receipt of the documents at 24 September. Local experts speculated that about 40 out of more than 60 stock exchanges in the country would close because of the FSC requirements.

According to media reports, 37 out of 66 local crypto-trading platforms have applied for registration. Experts have admitted that the vast majority of them will not be able to comply with the new rules. With the exception of the "big four" - Upbit, Bithumb, Coinone and Korbit - the platforms have failed to establish relationships with banks to use named accounts, they noted.

In March 2020, Korea's parliament passed legislative amendments requiring bitcoin exchanges to comply with financial reporting requirements, KYC rules and information security regulations.

To recap, the country's banks processed 64.2 trillion won (~$57.9 billion) worth of transactions on verified cryptocurrency-related accounts in the first quarter of 2021. The volume exceeded the figure for the entire year 2020.

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