Bithumb to block withdrawals to unverifiable wallets

South Korean bitcoin exchange Bithumb will prohibit users from withdrawing crypto assets to unverifiable third-party wallets. The new rule will take effect on 27 January 2022, according to a blog.

To register their addresses, users will have to undergo additional verification. The restrictions do not affect withdrawals to local or overseas centralized exchanges with strict KYC procedures.

According to Money Today, Bithumb came under pressure from its partner bank Nonghyup Bank. The latter allegedly demanded changes to the exchange’s policy to comply with the FATF’s ‘travel rule’ FATF.

The publication claims that the bank urged Bithumb to ‘block all wallets that do not have their own KYC system’. In particular, this concerns MetaMask and MyEtherWallet.

In March 2020, the Korean parliament passed amendments to the law obliging bitcoin exchanges to comply with financial reporting requirements, KYC rules, and information-security standards.

By 24 September 2021, platforms had to register with the FSC (Financial Services Commission of South Korea). In addition to complying with the commission’s rules, they were required to ensure KYC procedures in cooperation with partner banks.

The latter were reluctant to cooperate with exchanges, fearing additional scrutiny from financial regulators.

The first approval from the South Korean regulatorwas received by Upbit. In October the platform warned of restrictions for unverified users.

Back in autumn 2021, Bithumb said that it would block access for foreigners who had not verified their identity using a mobile phone.

Earlier the bitcoin exchange restricted access for users from high-risk jurisdictions as part of its anti-money-laundering policy.

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