South Korea will Impose a Ban on Anonymous Cryptocurrencies

Kataryna Habeliia November 6, 2020

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South Korea will impose a ban on anonymous cryptocurrencies

The FSC of South Korea (Financial Services Commission) will prohibit digital asset service providers from operating domestically with anonymous cryptocurrencies. Restrictions may apply to coins such as Zcash, Monero, and Dash.

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The changes will take effect from March 2021. They are designed to comply with the provisions of the Special Payments Act, which deals with the legality of cryptocurrency use in South Korea. The FSC turned to anonymous coins as it is difficult for the authorities to track the transactions associated with them.

The Commission will also require cryptocurrency exchanges to use the KYC / AML policy and report on their activities. Service providers will be required to check usernames.

Delisting anonymous cryptocurrencies on Korean crypto exchanges

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Previously, the country’s trading platforms started to abandon anonymous cryptocurrencies. In 2019, South Korean bitcoin exchange Upbit warned of the delisting of six anonymous coins: Monero, DASH, ZCash, Haven, BitTube, and PIVX.

In the same year, the Korean division of cryptocurrency exchange OKEx announced the end of support for Monero, ZCash, DASH, Horizen, and Super Bitcoin. The platform subsequently suspended the delisting process for ZCash and Dash.

Legalization of cryptocurrencies in South Korea

The South Korean parliament approved the full legalization of cryptocurrency trading in March 2020. Blockchain companies, crypto exchanges, and other industry participants must bring their activities in line with the new rules by September 2021.

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