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South Korea’s largest cryptocurrency exchange, Bithumb will ban past and new accounts of users that are from the blacklist of eleven Non Cooperative Countries and Territories (NCCT). The move was officially announced on Monday, 27th May and is part of the exchange’s compliance with the global anti-money laundering (AML) norms. Bithumb will block all transactions, trades and accounts of legal citizens from these NCCT countries.

Bithumb will comply with global AML practices

The ban is in effect from 28th May and will affect people from 11 countries from the Non Cooperative Countries and Territories. The countries from the NCCT blacklist have failed to comply with global Anti-money laundering norms and are seen by the international Financial Action Task Force (FATF) as countries that haven’t or have taken little action to fight money laundering. The international FATF agency was created by the G7 in 1980 and has set strict rules for Anti-Money Laundering, which resulted in the NCCT blacklist.

Some of these countries are considered to be financing terrorist organizations and other threats to the global financial system. The list of eleven countries includes: Ethiopia, Yemen, Vanuatu, Tunisia, Bosnia and Herzegovina, Syria, Iraq, North Korea, Iran, Sri Lanka, Trinidad and Tobago.

New accounts will be denied from this week and existing accounts that violate the new Bithumb policies will be banned by 20th June. A spokesperson for the South Korean exchange said:

“Users from Non-Cooperative Countries and Territories will be denied from using the exchange’s services so that cryptocurrencies are not used for money laundering or funding international terrorist organizations.”

Pressure from the South Korean government

Analyzing the data that coinmarketcap provides, we can say that Bithumb is the largest cryptocurrency exchange in Korea, but it is also the 5th largest token exchange platform in the world. Bithumb has around 350-400$ million in trading volume every day (data varies day to day). Bithumb have explained their decision, saying that they are active in their international anti-money laundering efforts. A spokesperson for the Korean exchange said:

“We are strictly enforcing our own rules to protect our users and investors, and we will proactively cooperate with the authorities.”

The South Korean government has acted fast and strict with its regulations on the country’s exchanges. Authorities were quick to secure and regulate the cryptocurrency market. Since the second part of 2017, the South Korean government has demanded compliance with the imposed regulations. They include identity verification, identity protection and taxes. Bithumb said that they improved their own anti-money laundering policies by working with authorities and implementing the recommendations from the government and the Korean Blockchain Association.

The country’s Blockchain Association was established in December of last year and has proposed multiple regulatory norms like transparency, anti-market manipulation, anti-insider trading and ethical codes. For the exchange’s users from all over the world, Bithumb is developing a mobile verification app to prevent scammers and falsifications of user’s data. The South Korean exchange has been one of the biggest cryptocurrency adoption activists and is working on implementing cryptocurrency use cases in the country.

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