Bithumb will soon block withdrawals to unregistered private wallets

A South Korean digital asset trading platform will ban withdrawals to unverified wallets from Thursday

In a statement shared yesterday, Bithumb exchange stated that it is taking further steps to manage cryptocurrency withdrawal services to third parties and private wallets. The exchange notes that after January 27, anonymous private wallet owners will not be able to successfully approve crypto withdrawals in the wallet. Affected wallets include MetaMask and MyEtherWallet.

Bithumb Follows Coinone and Fits Better

Bithumb is one of the most popular cryptocurrency trading platforms in the region and one of the four approved exchanges to provide cryptocurrency trading services. Affected users will need to verify their wallet with their Bithumb account and will be put into the blacklist before the specified date.

The validation steps include additional steps for KYK validation. It should be noted that withdrawals to domestic and international central exchanges that comply with KYC guidelines are still allowed. This means that users can transfer crypto assets to platforms such as Binance.US, Bitstamp, Blockchain.com, Bybit and Kraken.

Bithumb will be the second exchange to follow this path after Coinone announced at the end of last year that it would adopt this policy. The exchange provided users with a window of more than 3 weeks (closed on Sunday) to verify private and third-party crypto wallets.

Korean exchanges must take steps to enable tracking of cryptocurrency transactions on the platform until March 25, according to local government orders. This action is part of an effort to combat crypto-related fraud, including illegal funding.

However, some exchanges have not yet adopted the same. Two of them are from Korbit and Upbit. The two have not formally adopted this policy, but they are said to be seeking to implement it.

The local bank pressured the decision

Korean exchanges that offer trading pairs with Korean paper money, the Korean won, must have a local bank as a partner. These banks usually influence some exchange rules, as in Bithumb. This rule helps maintain security and makes it easier for exchanges to comply with the FATF’s travel rules.

Local news outlet Money Today reported that Bithumb’s decision was partially influenced by partner bank Nonghyup Bank. Local banks have put pressure on exchanges to ban wallets without a know-your-customer (KYC) system to ensure compliance with travel rules.

Bithumb aims to launch NFT Marketplace

Elsewhere, Bithumb is said to be developing a trading platform for non-fungible tokens, which will launch the market sometime this year and will be a joint venture with another company that acts as a technology partner.

The identity of the company is unknown, but the rumor may be LGCNS. In a recent interview, the CEO of the exchange revealed that Bithumb is already working on the NFT platform to stay competitive.

Rival exchanges Upbit (which represents the largest volume in the country) and Korbit already announced their NFT markets in November and July of last year, respectively.

Leave a Comment