South Korean crypto exchange, Bithumb announced on Thursday that it will no longer provide services to foreigners who failed to verify their identity using a local phone number.
“Foreigners residing in Korea who cannot process identification with mobile phones cannot use the service,” the official announcement added.
Additionally, the exchange urged the affected foreign users to withdraw their funds from the platform ‘within 2021 when customer due diligence becomes mandatory.’ However, it did not specify any dates as the deadline for the withdrawals.
According to the new exchange policy, none of the users can use its service if they cannot verify their identity with the verification code sent to Korean mobile phones. Earlier, Bithumb restricted foreigners without an alien registration card from accessing its services.
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Registration Deadline Looms
The Korean exchange made the move ahead of the upcoming deadline of September 24, after which, all local crypto exchanges are required to be registered with the financial authorities. Although, they need to comply with some strict set of regulations that are often termed as too harsh.
For instance, all South Korean crypto exchanges need to maintain real-name bank accounts for all of their clients, but banks are not willing to working with crypto exchanges. This requirement alone is expected to shutter dozens of small crypto trading venues operating in the country.
So far, only the four major South Korean exchanges: Upbit, Bithumb, Coinone and Korbit have managed to gain banking partners. Upbit, which is also the largest crypto exchange in the country in terms of trading volume, became the first Korean crypto exchange to register itself with the Financial Intelligence Unit (FIU).
Meanwhile, Bithumb, Coinone and Korbit recently formed a joint venture to develop a technique to impose a ‘travel rule’ on their platforms, which is another requirement of the South Korean authorities.