Bithumb to block crypto withdrawals to unverified private wallets
Starting on Jan. 27, the South Korean crypto exchange Bithumb will not allow users to withdraw their crypto assets to unverified private wallets.
On Jan. 24, the exchange announced that it would be the second of the four major exchanges in the country to ban withdrawals to unverified wallets. Coinone enacted a similar policy late last month and the other major exchanges are Upbit and Korbit.
The new policy states that users may only register their own private wallets. In order to perform the registration process, users must undergo an additional battery of know-your-customer identity verifications.
Withdrawals to any domestic centralized exchange and foreign centralized exchanges with a stringent KYC process such as Kraken, Bitstamp, Blockchain.com, Bybit, and Binance.US are still universally approved.
Local news outlet Money Today reported that the exchange faced pressure from its partner bank, Nonghyup Bank, to make the policy change in order to comply with the FATF Travel Rule. The Travel Rule is designed to let financial institutions know the identity of the senders and receivers of funds across borders.
The bank “strongly demanded” that the exchange “block all personal wallets that do not have their own KYC system.” Such wallets include MetaMask and MyEtherWallet, among others.
Every South Korean crypto exchange that offers Korean Won (KRW) trading pairs is required to have a domestic partner bank that issues real-name bank accounts to its users. A partner bank can have a strong impact on the exchange’s policies, as is the case with Nonghyup to Bithumb and Coinone.
Real-name bank accounts ensure that the person accepting fiat withdrawals from an exchange is the same person trading crypto on its platform. This policy
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