Privacy Coins Could be Banned in South Korea in 2021

Reading Time: 2 minutes
  • Privacy coins could be pulled from South Korean exchanges next year following a directive from the country’s financial regulator
  • The FSC called for a ban on “dark coins” following government guidance to eradicate money laundering within the cryptocurrency sector
  • OKEx Korea dropped privacy coins in 2019

Privacy coins could be banned from South Korean exchanges next year following a directive from the country’s financial regulator. The Financial Services Commission (FSC) issued the call in an update to the country’s Special Payment Act, the regulation that specifically covers cryptocurrencies, in which it referenced “dark coins” in particular, stating that the authority planned to ban exchanges from handling them as they aided money laundering.

South Korean Exchanges “Obligated” to Prevent Money Laundering

Privacy coins have been a bone of contention with regulators since they came into the limelight in 2017. Talk of banning them has been intimated by various authorities ever since, but none have actually gone ahead with legislation to do so.

South Korea has been one of the countries that has taken a stronger stance on privacy coins however, with the government taking the lead – in March, virtual asset providers were told that they were “obligated” to prevent money laundering within the ecosystem. That directive has led to the issuing of Monday’s regulatory change which includes the following (translated):

However, it is the definition of virtual assets to so-called ‘dark coin’, etc. Virtual assets that have a high risk of money laundering due to difficulty in determining transaction details. We plan to ban the handling of virtual asset providers.

It is clear from this alone that exchanges will soon have no choice but to delist privacy coins, with the notice on hold until December 14 for consultation. This could mean that South Korean exchanges will see in 2021 with the unpopular task of removing these coins from their platforms.

Privacy Coins Already Off OKEx Korea

One exchange that has already taken it upon itself to accede to the demands of the authorities’ stance on privacy coins is OKEx Korea, who delisted all their privacy coins, including Dash, Monero, and Zcash, last October.

Other exchanges such as UPbit, Bithumb, Huobi Korea, and Coinone will seemingly have to follow in their footsteps in the very near future.