Minor virtual money exchange suspends trading, warns of shutdown

By Lim Chang-won Posted : January 31, 2018, 10:40 Updated : January 31, 2018, 10:40

[Photo by Yoo Dae-gil = dbeorlf123@ajunews.com]


SEOUL, Jan. 31 (Aju News) -- Coinpia, a minor cryptocurrency exchange based in Seoul, threatened to shut down its business, complaining of "abnormal" trading caused by government regulations, including a customer identification system that allows only real-name accounts.

In a notice posted on its website on Wednesday, the exchange, which opened its service in May 2014 to deal with Bitcoin and Litecoin, said its troubled service for the deposit of the Korean won would lead to the suspension of all cryptocurrency transactions on February 6.

"We believe this is a necessary step to protect our normal crypto-ecosystem and the assets of customers," the exchange said, adding it has no other choice but to go out of business if there is no improvement in its current situation.

The notice came a day after six lenders including Shinhan and KB Kookmin introduced a customer identification system, allowing only real-name accounts used for deposits and withdrawals in cryptocurrency trading. Clients should disclose names, addresses, contact numbers, transaction purposes and the source of funds for virtual money trading.

The new system fueled concerns that banks may refrain from opening new contracts with virtual currency exchanges or convert only existing account holders into real names. Bank officials say they are cautious in making a contract with exchanges because of onerousness and a possible government lash. The withdrawal of money from previous accounts is still possible, but many investors went into hiding.

Coinpia accused regulators of pushing for the real-name system "without proper standards" despite concerns about covert transactions and a social side effect and said it has tried to prevent unlawful market activities, focusing on the original role of mediating between the crypto economy and the real economy.

Cryptocurrency exchanges have played a role in providing easy access to clients and standardize prices, Copinpia said, adding bocking only deposits would fuel "turmoil" in the market.

Financial regulators have threatened to close virtual accounts provided by six banks to cryptocurrency exchanges if they are found to have violated rules related to money laundering. They called for strong steps to prevent the "serious" side effects of irrational and excessive speculative investments as South Korea has become a hotbed for abnormal trading.
 
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