The Financial Services Commission of South Korea (FSC) will ban providers of services related to digital assets from operating domestically with anonymous cryptocurrencies. The restrictions could affect coins such as Zcash, Monero and Dash.
The amendments will take effect in March 2021. They were developed under guidelines aligned with the Special Payments Act, which governs the legality of cryptocurrency use in South Korea. The FSC targeted anonymous coins because authorities have difficulty tracing transactions linked to them.
The Commission will also require cryptocurrency exchanges to implement KYC/AML policies and to report on their activities. Service providers will be obliged to verify users’ real names.
Earlier, exchanges in the country began to delist anonymous cryptocurrencies themselves. In 2019, the South Korean bitcoin exchange Upbit warned of delisting six anonymous coins: Monero, Dash, Zcash, Haven, BitTube and PIVX.
In the same year, the Korean arm of the cryptocurrency exchange OKEx announced it would cease supporting Monero, Zcash, Dash, Horizen and Super Bitcoin. Later the platform paused the delisting process for Zcash and Dash.
Are Monero, Dash, Zcash and other anonymous cryptocurrencies facing a broad delisting, and what should investors expect?
In March 2020, South Korea’s parliament approved full legalization of cryptocurrency trading. By September 2021, blockchain companies, Bitcoin exchanges and other industry participants must bring their activities into line with the new rules.
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