Bithumb to block crypto withdrawals to unverified private wallets

Bithumb to block crypto withdrawals to unverified private wallets

Users will no longer be able to withdraw crypto assets from unverified private wallets starting Jan. 27 on the South Korean crypto exchange Bithumb.

The exchange announced on Jan. 24 that it would become the second major exchange to prohibit withdrawals from unverified wallets. Coinone, Korbit, Upbit, and Korbit all adopted a similar policy in the last month.

Users can only register their private wallets under the new policy. To complete the registration process, users will need to undergo additional know-your-customer identification verifications.

All withdrawals to domestic centralized and foreign exchanges that have undergone a rigorous KYC process, such as Kraken or Bitstamp, Blockchain.com and Binance.US, are still approved.

Money Today, a local news outlet, reported that Nonghyup Bank, the exchange’s partner bank, had urged it to change its policy in compliance with the FATF Travel Rule. The Travel Rule allows financial institutions to identify the recipients and senders of funds across international borders.

“Strongly requested” that the exchange “block any personal wallets that don’t have their own KYC systems.” This includes MetaMask, MyEtherWallet and others.

Each South Korean cryptocurrency exchange that offers trading pairs in Korean Won (KRW), must have a partner bank that issues bank accounts to its users. As is the case for Coinone and Nonghyup To Bithumb, a partner bank can have a significant impact on exchange policies.

A real-name bank account ensures that the same person withdrawing fiat from an exchange is trading crypto on its platform. This policy allows exchanges to comply with the Travel Rule by March 31. 25.

Upbit and Korbit are yet to issue any policy changes regarding personal crypto wallets. When the Korean government deems it necessary, all exchanges must adopt these policies by March 25, they will be required to establish them.

Related: Korean Bithumb Exchange launches NFT Marketplace

Statista estimates that Upbit handles approximately 76% of domestic trade volume, while Bithumb is second at 13%.

Failure to adhere to the Travel Rule can lead to increased anti-money laundering or combatting the financing of terrorism (AML/CTF monitoring).

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