South Korean Crypto Exchange Cracks Down, Requiring Address Ownership Identity

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In Brief
  • Korean cryptocurrency exchange Korbit has locked a user out from withdrawing funds.

  • Korbit is demanding that the user proves their identity as the wallet owner.

  • This comes among increasing oversight from regulatory bodies in the crypto ecosystem.

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The Trust Project is an international consortium of news organizations building standards of transparency.

As the industry evolves and matures, the eagle eye of some regulators is focusing on ways to tip the scales back in their favor.

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A Twitter user is now alleging that the South Korean Korbit cryptocurrency exchange is requiring proof of ownership of digital addresses. If a user does not verify the address with their identity, the exchange will withhold the user’s ability to withdraw.

Whether this is purely an internal measure or is an order that was handed down from government officials is not clear. Still, it highlights the importance of decentralized and alternative exchanges.

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My House, My Rules

The user highlighted an e-mail from Korbit, a prominent Korean cryptocurrency exchange. The user, who goes by the handle @Jawnbear, translated the original message from Korean to English.

The message explains that access to their funds has been restricted on Korbit. It was not made explicitly clear why the user has limited fund access, other than ‘internal transaction monitoring.’ Until Jawnbear verifies the address ownership, satisfying Korbit’s new KYC and AML measures, they will be unable to process any withdrawals.

BeInCrypto reached out to Jawnbear and Korbit for comment but have not heard back at the time of publishing. Any new updates will be added at a later time.

Korbit offers many cryptocurrencies to trade, including XRP, which was recently alleged to be a security by the U.S. SEC (although it has no jurisdiction over Korean markets). Perhaps these restrictions could be the result of the exchange erring on the side of caution, although, until Korbit is able to verify, it’s purely speculation.

Pressure on Cryptocurrency Holders

With Bitcoin, Ethereum, and many other cryptocurrencies breaking all-time highs, more institutions are getting involved. Considering the fact that many need to act in a fully regulatory compliant manner, clarity on regulations is of the utmost importance.

This was a topic recently brought to light by SEC Commissioner and ‘Crypto Mom‘ Hester Pierce, directly calling for more oversight in the space. Pierce has asserted that the increase in institutional involvement warrants more clarity. As companies and institutions like Tesla, BNY Mellon, and PayPal begin to implement and purchasing crypto, this call for more regulatory insight may just be the beginning.

For now, we do not know if regulations will escalate in Korea, but users should be wary.

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Harrison is an analyst, reporter, and lead specialist at BeInCrypto based out of Tel Aviv, Israel. Harrison has been involved in the cryptocurrency space since late 2016 and is passionate about decentralized ledger technology and its potential.

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