Bithumb To Block Crypto Withdrawals To Unverified Private Wallets

Bithumb the South Korean crypto exchange will not allow users to withdraw their crypto assets to unverified private wallets starting from January 27 2022

Bithumb exchange, Jan. 24, announced that it would be the second of the four major exchanges in the country to ban withdrawals to unverified wallets.

Coinone implemented a similar policy late last month, and Upbit and Korbit are the other major exchanges.

According to the new policy, users may only register their own private wallets.

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Users must go through an additional battery of know-your-customer identity verifications in order to complete the registration process.

Withdrawals to any domestic centralized exchange and foreign centralized exchange with a strict KYC process, such as Kraken, Bitstamp, Blockchain.com, Bybit, and Binance.US, are still universally accepted.

According to the local news outlet Money Today, the exchange was under pressure from its partner bank, Nonghyup Bank, to change its policy in order to comply with the FATF Travel Rule.

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The Travel Rule is intended to provide financial institutions with information about the identity of those who send and receive funds across borders.

The bank “insists” that the exchange “block all personal wallets that do not have their own KYC system.” Among these wallets are MetaMask and MyEtherWallet.

Every South Korean cryptocurrency exchange that provides trading pairs in Korean Won (KRW) is required to have a domestic partner bank that provides real-name bank accounts to its users.

As with Nonghyup to Bithumb and Coinone, a partner bank can have a significant impact on the exchange’s policies.

Real-name bank accounts ensure that the person accepting fiat withdrawals from an exchange is also trading cryptocurrency on the exchange’s platform. This policy assists exchanges in meeting the Travel Rule deadline of March 25.

Upbit and Korbit have not yet issued any policy changes pertaining to personal crypto wallets. When the Korean government deems it necessary for all exchanges to adopt such policies, exchanges will be required to set those policies by March 25.

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According to Statista, Upbit handles approximately 76 percent of domestic trading volume, while Bithumb handles approximately 13%.

Failure to comply with the Travel Rule may result in increased anti-money laundering and counter-terrorism financing (AML/CTF) monitoring.