The South Korean digital asset trading platform is blocking withdrawals to wallets that are unverified starting Thursday.
In an announcement published yesterday, exchange Bithumb announced that it is taking further steps to manage crypto withdrawal services for private and third-party wallets. The exchange noted that starting Jan. 27, owners of unverified private wallets will no longer be able to successfully authorize crypto withdrawals to their wallets. Affected wallets include MetaMask and MyEtherWallet.
Bithumb follows Coinone, more to come
Bithumb is one of the most popular crypto exchanges in the region and one of four licensed to offer crypto trading services. Affected users will need to validate their wallets with their Bithumb accounts in order to be “allowed” before the specified date.
The verification process includes additional know-your-customer verification steps. Notably, withdrawals to local and international centralized exchanges that comply with KYC guidelines are still allowed. This means users can transfer their crypto assets to exchanges like Binance.US, Bitstamp, Blockchain.com, Bybit, and Kraken.
Bithumb is the second exchange to go this route after Coinone announced it would adopt the policy late last year. The exchange gave its users a window of more than three weeks (ending on Sunday) to review its private and third-party crypto wallets.
Exchanges in Korea must take action until March 25, which will allow them, crypto transactions on its platform in accordance with an arrangement to pursue the local government. The measures are part of efforts to combat crypto-related fraud, including illegal funding.
However, some exchanges have yet to embrace it. Two of them are Korbit and Upbit. The two have not officially adopted the policy, but are said to be examining its implementation.
A local bank lobbied for the decision
South Korean exchanges that offer trading pairs in Korean fiat, Korean won, are required to partner with a local bank . These banks usually have leverage over some of the rules of the exchange, as is the case with Bithumb. This rule helps maintain security and makes it easier for exchanges to comply with FATF travel rules.
Local news outlet Money Today Local reports that Bithumb's decision was partially influenced by partner bank Nonghyup Bank. The domestic bank put pressure on the exchange to ban wallets without their KYC system to ensure Travel Rule compliance.
Bithumb plans to launch an NFT marketplace
Elsewhere, Bithumb is reportedly developing a trading platform for non-fungible tokens. The marketplace is scheduled to launch later this year and will be a joint venture with another company acting as a technical partner.
The identity of the company is unknown, but rumors suggest it could be LG CNS. The exchange's CEO revealed in a recent interview that Bithumb is indeed working on an NFT platform to remain competitive.
Competing exchanges Upbit (which accounts for the largest trading volume in the country) and Korbit unveiled their NFT marketplaces back in November and July last year, respectively.
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