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South Korea Rejects Plan to Allow Securities Companies to Issue Encrypted Asset Real-Name Accounts

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On March 3, the South Korean financial authorities decided not to expand the issuing institution of the encrypted asset real-name account required by the encry…

South Korea Rejects Plan to Allow Securities Companies to Issue Encrypted Asset Real-Name Accounts

On March 3, the South Korean financial authorities decided not to expand the issuing institution of the encrypted asset real-name account required by the encryption exchange to outside the bank. People in the financial industry have put forward a plan to allow securities companies to issue encrypted asset real-name accounts, but the financial authorities of the country said that compared with banks, securities companies and other financial companies have relatively low ability to prevent money laundering. In addition, in the event of losses and closure of the exchange, the financial companies that open accounts may also have various burdens, so it is necessary to be responsible by institutions with sufficient financial capacity. In addition, allowing securities companies to issue real name accounts for virtual assets runs counter to the strict policy orientation, and due to the proliferation of exchanges that can trade Korean won, investment foam may occur.

The South Korean financial authorities rejected the proposal of “allowing securities companies to issue encrypted asset real-name accounts”

Interpretation of the news:


On March 3, the financial authorities of South Korea announced the rejection of a plan proposed by individuals in the financial industry that would have allowed securities companies to issue real-name accounts for virtual assets. The encrypted asset real-name account requirement had previously been expanded to different banks, but the financial authorities decided to limit it to just banks and not include other financial institutions such as securities companies.

One of the reasons cited by the financial authorities for their decision was that securities companies and other financial institutions had relatively low abilities to prevent money laundering compared to banks. This presents a risk to the financial sector and the country as a whole since money laundering can have negative implications for the economy. Additionally, financial companies that open accounts for encrypted assets may be susceptible to various burdens in the event of losses and closure of the exchange.

The financial authorities emphasized that institutions with sufficient financial capacity should be responsible for opening real-name accounts for virtual assets. This decision ensures that the risk of financial instabilities is minimized while the financial sector is safeguarded.

Allowing securities companies to issue real-name accounts for virtual assets contradicts the strict policy orientation of the financial authorities. South Korea has put in place strict regulations on the buying and selling of virtual assets to avoid investment foam or speculative bubbles. Permitting securities companies to open accounts for virtual assets could create excessive trading leading to the creation of speculative bubbles within the virtual asset market.

In conclusion, South Korea’s financial authorities’ decision to limit the issuing institution of the encrypted asset real-name account to banks helps to ensure that money laundering is prevented, risks minimized, and the financial industry is safeguarded. The decision also helps to steer the country’s investment policies in the right direction and keeps potential speculative bubbles from forming.

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