A Third of Humanity Remains Financially Excluded

Statistics: A Third of Humanity Remains Financially Excluded

Unrestricted access to financial services is one of the main preconditions for achieving economic freedom. However, large portions of the planet’s population, especially in the developing world, remain excluded from the traditional banking system. The number of the unbanked or underbanked citizens of the industrialized, digitized nations is also unexpectedly high, now when almost everyone, everywhere has a smartphone in their pocket.

Also read: More Banks Sanctioned for AML, Fraud-Related Violations

Women and the Poor Less Likely to Have a Bank Account

Statistics: A Third of Humanity Remains Financially ExcludedCryptocurrencies offer an alternative path, a fast track to financial inclusion. Unfortunately, instead of facilitating it, overly worried states, authorities and regulators often hamper the economic emancipation of those whose interests they are supposed to uphold. Trying to please political powers, many banks around the world have been busy raising barriers to both individuals and businesses dealing with cryptocurrency. That’s not to say they’ve done enough to broaden the availability of their fiat-related financial services and products.

Statistics from a number of sources, multiple reports and analyses show that the share of the financially excluded members of societies remains large, despite some positive trends recently. The spread of mobile phones and improved access to the internet have accelerated financial inclusion – over 500 million adults have opened bank accounts since 2014 – but this process develops unevenly across different regions and countries, according to a report by the World Bank.

The Global Findex Database 2017, a study on how people in 144 economies use financial services which was published in the spring of this year, shows that almost a third of the planet’s population remains unbanked. 69% of adults now have an account at a bank or with a mobile money provider. However, while the global number of account holders has increased significantly from 62% in 2014, the progress in nations, characterized by large disparities between men and women, where the gap remains unchanged year after year, and between rich and poor, has been much slower.

Regions That Suffer the Most From Exclusion

Statistics: A Third of Humanity Remains Financially ExcludedMobile money services have had a positive effect on financial inclusion in Sub-Saharan Africa. The number of people using them has doubled in three years but, nevertheless, remains very low – at 21%, while the share of adults holding accounts with a traditional financial institution stays flat. A fifth of the populations in 8 countries – Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe ­– use only mobile money accounts. Still, 95 million unbanked adults in the region, receive only cash payments for agricultural products, for example. In North Africa and the Middle East, there is another problem – only 35% of women have an account, the largest gender gap among all studied regions. Also, up to 20 million unbanked adults send or receive domestic remittances using only cash or over-the-counter services.

In Europe and Central Asia, account ownership has increased to 65% in 2017, driven largely by digital government payments of wages, pensions, and social benefits – 17% of the holders opened their first account to receive government payments. At the same time, 40% of the people are currently not making or receiving digital payments. In South Asia, 30% of the adults do not have a banking account. India is a notable exception, with 80% of Indians having an account with a financial institution. In East Asia and the Pacific, however, the growth in account ownership has stagnated during the researched period – close to 30% of the people in the region remain unbanked.

Statistics: A Third of Humanity Remains Financially ExcludedLess than half of Indonesians, whose country has actually scored an increase, currently have an account. Digital financial transactions have accelerated in China, where the share of account owners using the internet to pay bills or purchase goods more than doubled – to 57 percent. The People’s Republic has witnessed the rapid growth of mobile payment services like Alipay and Wechat Pay, while authorities have escalated the crackdown on crypto-related activities. Statistical data shows, however, that over 400 million account owners in the region still pay their utility bills in cash, despite the fact that 95% of them have a mobile phone.

More than half of the adults living in Latin America and the Caribbean own a mobile phone and have access to the internet, which is 15% more than the developing world average. Despite that, only about 20% of account holders in countries like Argentina and Brazil use their mobile devices or the World Wide Web to make financial transactions. By digitizing cash wage payments, the World Bank says, businesses could expand account ownership to up to 30 million currently unbanked adults. Almost 90 percent of them own a mobile phone, according to the report.

The Land of Opportunities Isn’t Faring Much Better

Statistics: A Third of Humanity Remains Financially ExcludedWell, you would’ve thought that the situation is way better in developed economies like the US, but it actually isn’t that different. When the level of development of financial services is taken into account, results should be much more encouraging. According to a detailed report from 2016, produced by the Federal Deposit Insurance Corporation, 7% of American households are unbanked – yes, that’s households, not individuals. The unbanked black households, however, were over 18% of the total, more than 16% among Hispanic households. Unbanked rates for Asian households actually increased during the examined two-year period, from 2.2 to 4%.

According to another study, a report by the Corporation for Enterprise Development titled “The Most Unbanked Places in America”, almost 18% of US households are ‘underbanked’ – the term describes people with insufficient access to mainstream financial products such as credit cards and loans. Lacking proper access to common services from retail banks, many of these citizens are often heavily reliant on micro-finance services such as those offered by loan sharks and pawnbrokers. According to the authors, cities where over a fifth of the residents do not have bank accounts include Miami (Florida), Detroit (Michigan), and Newark (New Jersey).

Do you think cryptocurrencies can significantly improve financial inclusion? Share your thoughts on the subject in the comments section below.  


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Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto Traders

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto Traders

Two major South Korean cryptocurrency exchanges have announced that they will no longer allow unverified users to make withdrawals in Korean won. Starting next month, users of Bithumb and Coinone must have verified real-name accounts in order to deposit and withdraw the fiat currency.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Bithumb Goes All Real-Name

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto TradersBithumb, the largest crypto exchange by trading volume in South Korea, announced on Friday, Sept. 14, that it will terminate fiat withdrawal service for all users without verified real-name accounts.

The service will end on Oct. 1 for corporate members and on Oct. 15 for individual members. Bithumb says the move is to comply with the government’s anti-money laundering policy.

However, the exchange clarified that this announcement only affects fiat withdrawals, emphasizing:

Cryptocurrency transactions and withdrawals can be used normally.

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto TradersThe South Korean government introduced the real-name system for crypto exchanges at the end of January. Members of an exchange using this system can convert their accounts to real-name ones at the bank that provides the conversion service to the exchange.

So far, banks have only been offering this service to the country’s top four exchanges – Bithumb, Upbit, Coinone, and Korbit. Nonghyup Bank provides this service to Bithumb and Coinone.

Despite efforts by the government, banks, and exchanges, local media recently reported that only about 40-50 percent of accounts at the four exchanges have been converted to date. News.Bitcoin.com reported last week that banks have been pressuring crypto exchanges to take measures to ensure conversion in order to reduce the risk of money laundering.

Coinone Makes Similar Move

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto TradersSouth Korea’s third-largest crypto exchange, Coinone, also made a similar announcement on Friday.

The exchange explained that “Nonghyup Bank requested Coinone to limit the withdrawal of Korean currency” for members who have not verified their accounts by a certain date “pursuant to the Act on Reporting and Utilization of Specific Financial Transaction Information.” Coinone elaborated that effective Oct. 15:

In order to comply with the government policy related to virtual currency transactions, we will limit the withdrawal of persons who have not completed the real name verification.

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto TradersAfter Oct. 15, users who do not have real-name accounts will be “unable to deposit and withdraw in Korean currency,” Coinone wrote. The exchange is asking users to make withdrawals before that date if they do not plan to convert to real-name accounts by then.

“When you authenticate real-name verified accounts, you can deposit and withdraw in Korean currency,” Coinone described. Like Bithumb, the exchange reiterated that the notice does not affect crypto trading, deposits, or withdrawals. Both exchanges have also confirmed that corporations, minors, and foreigners are not eligible for real-name conversion.

At the time of this writing, Upbit and Korbit, which do not use Nonghyup Bank, have not announced that they will stop providing Korean won withdrawal service to unverified users.

What do you think of Bithumb and Coinone disallowing fiat withdrawals for users without real-name accounts? Let us know in the comments section below.


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Chile Appeals Court Rules in Favor of Crypto Exchange Against Bank

Chile Appeals Court Rules in Favor of Crypto Exchange Against Bank

In an ongoing dispute between banks and cryptocurrency exchanges in Chile, an appeals court has finally ruled in favor of one crypto exchange against one of the largest banks in the country. Five major banks have also separately responded to lawsuits against them in court.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Court of Appeals Ruling

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankThe Fourth Chamber of the Court of Appeals of Santiago has ruled in favor of cryptocurrency exchange Orionx against Banco Estado for closing its account, local media reported. The ruling, which orders the only government-owned bank in Chile to reopen the exchange’s account, was published on Thursday.

The court decided that the bank’s action constitutes “an arbitrary and illegal action, which constitutes a deprivation of the right protected by Article 19 No. 2 of the Political Constitution of the Republic, that is, the right to equality before the law,” La Tercera quoted the ruling.

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankBy closing the exchange’s account, the bank is preventing Orionx “from developing an activity that, although not regulated, does not prevent the bank from adopting less intensive security measures such as the development of effective monitoring and control programs before the final closure of the account,” Emol news outlet cited the ruling. The publication elaborated:

The document refers to breaches of contract and the impossibility of Banco Estado to determine that Orionx engages in money laundering with the currencies with which it operates.

While acknowledging the risks associated with crypto transactions, the court explained that businesses using them “as new forms of investment and payment…cannot necessarily be identified with the commission of criminal acts.”

Banks Responding to Lawsuits

A few lawsuits have been filed against the country’s major banks with the Court for the Defense of Free Competition (TDLC – Tribunal de Defensa de la Libre Competencia).

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankOrionx sued six major banks last month for abusing their power and quashing its crypto payment business. Previously, another crypto exchange, Buda.com, filed a lawsuit against ten banks for closing its accounts and well as the accounts of another local crypto exchange, Cryptomkt. The antitrust court subsequently ordered three banks, including Banco Estado, to reopen the crypto exchanges’ accounts while the lawsuit is still pending.

On Friday, Diario Financiero reported that five banks have responded to the lawsuit against them before the TDLC. The banks are Santander, Banco de Chile, Banco de Crédito e Inversiones (Bci), Scotiabank, and Itaú. The exchanges allege that they abused their dominant position when they either closed the accounts of or denied opening them for crypto exchanges.

Santander wrote in its response letter that “the use of a current account would not be essential for the digital currency traders,” the publication conveyed.

Banco de Chile responded:

The closing of Cryptomkt’s current accounts is not based on the alleged danger of the activity carried out by the plaintiff or because it is not regulated by the authority, but…in the absence of concrete information that allows Banco de Chile to develop the due diligence in the matter of money laundering, since it is required to justify the transactions in the current accounts.

Bci denied any abuse of a dominant position, stating that it would be difficult to do so because crypto “is a practically decentralized market, with a large number of actors, according to public information available.”

What do you think of the Appeals Court’s ruling? Let us know in the comments section below.


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Indian Central Bank Responds About Crypto Restrictions

Indian Central Bank Responds About Crypto Restrictions

India’s central bank has responded to a representation about its crypto banking ban. The Supreme Court gave the central bank seven days to reply following a hearing last week of the petition by the Internet & Mobile Association of India against the ban.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

RBI’s Response

Indian Central Bank Responds About Crypto RestrictionsIndia’s central bank, the Reserve Bank of India (RBI), has responded to a representation submitted by the Internet & Mobile Association of India (IAMAI), as directed by the country’s Supreme Court.

Nischal Shetty, the CEO of crypto exchange Wazirx, told news.Bitcoin.com that the representation is “a detailed document explaining blockchain, cryptos and how they function,” noting that it was “made with the belief that if the RBI gets a deep understanding of blockchain and crypto then they may go easy on the ban and think about regulations.”

Indian Central Bank Responds About Crypto RestrictionsThis representation was sent to the central bank on July 3 during the IAMAI petition hearing. The Court ordered the central bank to reply within seven days. On July 11, RBI finally sent its response to the association.

According to Sohail Merchant, the CEO of Indian crypto exchange Pocketbits, RBI’s reply is a “2 page generic response.” While stating that “as of now the response cannot be made public” but there is “not much to read though,” he commented:

IAMAI received the response from RBI as directed by SC [Supreme Court], the response is generic with the same language as the public circulars. They have not even given deliberate thought to the points made by us, all the basis of their arguments is ‘Investor Protection.’

Shetty reiterated, “RBI has responded to IAMAI…They aren’t changing their stand.”

Until Next Hearing on July 20

The central bank issued a circular on April 6 banning all financial institutions under its control from providing services to companies dealing in cryptocurrencies, including crypto exchanges.

Indian Central Bank Responds About Crypto RestrictionsRBI gave banks three months to sever their relationships with crypto businesses. As the ban went into effect on July 5, banks began closing accounts of crypto exchanges. One by one, the exchanges stopped supporting fiat deposits and withdrawals.

To bypass banking restrictions, a number of exchanges are launching peer-to-peer (P2P) trading services. Koinex and Coindelta are reportedly launching their P2P services on July 15. Wazirx, on the other hand, already launched its P2P service. The company wrote, “Wazirx P2P goes live today, 10th July at 3PM. With Wazirx P2P, a buyer and seller can buy and sell cryptos for INR directly with each other.”

Meanwhile, industry participants and stakeholders are trying to get the RBI ban lifted by filing petitions with the Supreme Court, which will all be heard on July 20.

Do you think RBI will soon lift the banking ban on crypto? Let us know in the comments section below.


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Switzerland Considers Granting Crypto Businesses Access to Banking Services

Switzerland Considers Granting Crypto Businesses Access to Banking Services

Crypto companies based in Switzerland may receive access to regular banking services as early as this year. Political will and economic wisdom seem to be in place as some government officials and bankers are already working to resolve a serious issue. Swiss banks have been refusing accounts to firms from the growing crypto industry.

Also read: Swiss Crypto Company Acquires License to Distribute Funds to Investors

Banks Expected to Offer Services by the End of the Year

Switzerland Considers Granting Crypto Businesses Access to Banking ServicesIn terms of crypto development, Switzerland is now standing at a crossroad. With very few exceptions, most of its banks have been refusing banking services to a growing number of startups residing in the country’s Crypto Valley and this is beginning to suffocate growth in the fintech sector.

Luckily, far-sighted policy makers and seasoned financiers have already pulled their sleeves up and are working to break the deadlock. One of them is Heinz Tännler, the finance director of the canton of Zug, home of the Swiss Crypto Valley. Speaking to the Financial Times, Tännler said he expected Swiss politicians and regulators to remove the obstacles in the coming months, which would allow crypto companies based in the country to operate with banks just like any other business. He added:

We hope to clarify relationships by the end of the year at the latest. Time is pressing – other jurisdictions such as Malta and Singapore are very active and making a lot of effort to attract these companies. The lack of access to bank services is a significant competitive disadvantage.

According to Mr. Tännler, the country’s central bank, financial supervisor and federal government “are willing to help.” He also stressed that “We have to push certain national institutions to resolve this problem quickly and effectively, but that now seems to be going well.”

Traditional financial institutions are increasingly under pressure to offer crypto startups regular services like bank accounts. According to Swissinfo, the bottleneck has become acute since the ICO craze brought $1.46 billion to Switzerland last year. A recent report by the Crypto Valley Association revealed that token sales through May this year have attracted nearly double the funds raised in 2017.

Mounting Pressure to Break the Deadlock

Switzerland Considers Granting Crypto Businesses Access to Banking ServicesRepresentatives of the industry have warned that if crypto businesses are not provided with access to banking services they may start looking for better conditions elsewhere.

“Starving startups of bank accounts is akin to killing the goose that laid the golden egg,” said blockchain and cryptocurrency expert Guido Schmitz-Krummacher, former director of the Tezos foundation and advisor to projects like Cardano. He believes that the failure to provide a reliable environment for startups will harm the reputation of the Crypto Valley in Zug.

“I am already seeing projects choose Singapore, Malta and Gibraltar because they can’t get a bank account in Switzerland. They will be followed by projects already established in Switzerland unless the banks and politicians address this topic.” The lack of access to normal banking services is worrying, according to Alain Kunz, chief executive of Coinlab Capital, a startup offering blockchain asset management services. “You can do a lot with crypto but you can’t pay rents and salaries,” he told the FT.

Switzerland Considers Granting Crypto Businesses Access to Banking Services

Some Swiss politicians and bankers have already heard these worries. In January, economy minister Johann Schneider-Ammann shared a vision of Switzerland becoming a “Crypto Nation.” His colleague, finance minister Ueli Maurer went a step further by forming a working group with representatives of the Swiss Bankers Association (SBA), the financial regulator and the central bank in an attempt to find a solution. The SBA has also set up a taskforce and is planning to establish a set of standards for ICO startups in order to simplify the process of opening bank accounts.

“Both we as an association and the banks have an interest in business relations in this growth area. Banks see the potential that the blockchain technology offers for their industry and Switzerland as a financial and technology hub,” the SBA said in a written statement quoted by Swissinfo. Welcoming its actions, the Crypto Valley Association (CVA) said it anticipated “a progressive broadening of offerings by a number of Swiss banks.”

Switzerland Considers Granting Crypto Businesses Access to Banking ServicesVery few legacy institutions in Switzerland have so far declared readiness to offer services to the 200 Zug-based blockchain and crypto firms. Among them are Neuchâtel Cantonal Bank and Neue Helvetische Bank. They were joined recently by Hypothekarbank Lenzburg, which announced this month it was accepting cryptocurrency related businesses as account holders. In the meantime, some Swiss startups have opened bank accounts in neighboring Liechtenstein using the services of local banks such as Frick and Alpinum. Others have decided to enter the sector of traditional financial services through partnerships.

Do you expect Swiss banks to offer crypto companies unrestricted access to banking services? Share your thoughts on the subject in the comments section below.


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Bitcoin Businesses Denied Banking Services in Ireland

Bitcoin Businesses Denied Banking Services in Ireland

Leading companies from the crypto sector in Ireland have complained they are being denied services by some of the country’s major financial institutions. Among the affected businesses are bitcoin exchange Bitcove, winner of the bank-sponsored “Best Business Startup” award, and Ireland’s “longest running” bitcoin broker, Eircoin.  

Also read: Swiss Crypto Company Acquires License to Distribute Funds to Investors

Banks Close Accounts of Award-Winning Startup

Several Irish businesses have been forced to either stop trading cryptocurrencies or seek partners abroad after local financial institutions refused to offer them banking services. Some of them have lost their bank accounts, while others have never been allowed to open one in the country, the local press reported.

Bitcoin Businesses Denied Banking Services in Ireland

Bitcoin exchange Bitcove, which has been operating since 2014 and had previously worked with Allied Irish Banks (AIB), Permanent TSB and Bank of Ireland, is one of the affected companies, The Irish Times reported. One of its co-founders, Peter Nagle, told the newspaper the banks closed its accounts stating they do not support companies offering cryptocurrency exchange facilities. The trading platform has since been using the services of “a more progressive banking partner” in Europe.

“Particularly disappointing was Bank of Ireland. We were participants on the Ignite startup program, which is backed by the bank. Our business and its progress were reviewed monthly by a panel which included Bank of Ireland representatives. At the end of the incubator Bitcove won the award, but then just a few months later our accounts were frozen and eventually closed,” Nagle explained.

One of Ireland’s First Bitcoin Brokers Also Hit

Bitcoin Businesses Denied Banking Services in IrelandAnother crypto firm that has suffered from the clampdown is Eircoin, one of Ireland’s oldest bitcoin brokers, which closed a couple of months ago. An affiliated consulting business was also refused banking services. “We are being shuttered due to a negligent and defensive banking system,” Eircoin’s cofounder Dave Fleming said, quoted by the Irish daily. He added that his company, along with other cryptocurrency sellers, had previously consulted with the Central Bank of Ireland which told them that as long as they were abiding by the regulations their operations were in line with the law.

Bank of Ireland, one of the four largest Irish commercial banks, admitted in a statement it was not providing banking services to virtual currency exchange platforms, but noted that its customers were not prevented from transacting cryptocurrency. AIB Group, another “Big Four” bank, denied it was refusing services to companies from the crypto sector. A spokesman was quoted as saying, “We don’t discriminate in relation to providing banking services to cryptocurrency companies nor have we been systematically exiting such companies.” According to the official, some of these businesses are unable to comply with the anti-money laundering and know your customer requirements that the bank is obliged to adhere to.

Bitcoin Businesses Denied Banking Services in IrelandThe Banking and Payments Federation of Ireland (BPFI) stated that it wasn’t aware of any policy to close accounts of companies trading cryptocurrencies. However, the organization presenting 70 traditional financial institutions noted that Irish lenders are expected to take measures to minimize the risk of facilitating “financial crimes which are enabled by cryptocurrencies,” such as money laundering and terrorism financing.

Sharp Contrast

The negative attitude of the legacy financial institutions towards crypto businesses sharply contrasts with the view of Ireland as a crypto-friendly jurisdiction in general. Recently, it was reported that a new government-backed platform will promote the country as a hub for developers of applications based on the technology behind cryptocurrencies. Blockchain Ireland was launched by the Irish Blockchain Expert Group in partnership with a young company called Consensys. The initiative is supported by Enterprise Ireland, the Department of Finance, members of the industry and representatives of academic institutions. The agency promoting foreign investment in the country, IDA Ireland, has also backed blockchain and crypto projects.

Bitcoin Businesses Denied Banking Services in Ireland

Cryptocurrencies and the related economic activities received another recognition by authorities in Dublin with the decision of the Irish revenue service to issue guidelines on the taxation of crypto transactions. The new “Tax and Duty Manual” clarifies related matters and confirms that in most cases the existing tax regulations apply to the crypto sector. According to the advisory, crypto incomes and profits are subject to direct taxes such as corporate tax, income tax, and capital gains tax. Officials have also stated that for VAT purposes bitcoin constitutes a currency. The Irish tax agency regards cryptocurrencies as “negotiable instruments” and exempts them from the value added tax.

Do you think the bank clampdown on crypto businesses in Ireland is temporary? Share your thoughts on the subject in the comments section below. 


Images courtesy of Shutterstock, Bitcove, Eircoin, BPFI.


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Venezuela Begins Monitoring Bank Accounts for Crypto Transactions

Venezuela Begins Monitoring Bank Accounts for Crypto Transactions

The government of Venezuela has started monitoring the bank accounts of its citizens for cryptocurrency-related transactions. Accounts found to contain crypto transactions at prices which the government considers to be “undermining the national currency” will be “severely punished,” Vice President Tareck El Aissami said.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Next Phase of Operation Paper Hands

Following the launch of “Operation Paper Hands,” as news.Bitcoin.com previously reported, the Venezuelan government has initiated the next phase of its plan to reduce capital flight, calling it “Operation Metal Hands.”

Venezuela Begins Monitoring Bank Accounts for Crypto Transactions
Tareck El Aissami.

This new phase was launched last week with a focus on what they call “gold smugglers,” or Venezuelans who bought gold from small miners and then sold it outside of the country. The operation has “detected that these mafias have distorted the prices of the dollar,” the country’s Vice President Tareck El Aissami declared, adding that “they have migrated through the market of cryptocurrencies to hit the Venezuelan monetary system.”

The operation further targets capital flight via cryptocurrencies. El Aissami explained that the government will start monitoring bank accounts for crypto-related transactions and will prosecute those trading them “at speculative prices.”

“This is part of a war to hit the financial system of the country,” Aporrea publication stated, “and they [the government] will exercise future actions to hit those who try to conspire through cryptocurrencies.” The Vice President was quoted by La Red publication:

All the accounts that we identify that are linked to the manipulation are going to be severely punished and (those responsible will be) placed at the order of justice.

He revealed that, as part of Operation Paper Hands, “5 billion bolivares [~US$50,000] in bank accounts were frozen at Banesco bank, and 12 trillion bolivares [~$120 million] were seized that were destined for contraband in Colombia,” Aporrea publication conveyed.

Three Remittance Houses Legalized

Venezuela Begins Monitoring Bank Accounts for Crypto TransactionsSince the launch of Operation Paper Hands, three remittance houses were shut down, including two crypto exchange operators. However, the government soon realized that underground cryptocurrency transactions did not cease.

This led the Vice President to announce last week that three money exchangers in Caracas have been specifically authorized to handle the country’s foreign exchange transactions and remittances. He was quoted by Correo Del Orinoco:

We have authorized three exchange houses, private companies, private exchange operators, legally authorized, to perform all operations associated with remittances.

The three exchanges are Zoom, Italcambio, and Insular. However, their websites do not indicate that they deal with cryptocurrencies in any way.

For the purpose of buying and selling cryptocurrency specifically, the Venezuelan president, Nicolas Maduro, announced in April that he had certified 16 exchanges with the aim for them to list his country’s own digital currency, the petro.

What do you think of Venezuela monitoring bank accounts for crypto transactions? Let us know in the comments section below.


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Indian Crypto Exchanges Engage with RBI to Offer Banking Ban Alternatives

Indian Crypto Exchanges Engage with RBI to Offer Banking Ban Alternatives

Indian cryptocurrency exchanges have followed the Supreme Court’s suggestion for them to present their cases to the Reserve Bank of India. They have sent letters to the central bank, offering alternatives to the RBI’s banking ban.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Supreme Court’s Suggestion

Cryptocurrency exchanges in India have reportedly sent their pleas to the Reserve Bank of India (RBI) as directed by the Supreme Court’s ruling last month.

Indian Crypto Exchanges Engage with RBI to Offer Banking Ban Alternatives
Indian Supreme Court.

The central bank mandated in April that all financial institutions under its control must stop servicing cryptocurrency exchanges and other crypto-related businesses within three months. Some crypto exchanges subsequently took the RBI to court; their writ petitions were passed to the Supreme Court.

The country’s top court decided to hear all the petitions against the RBI ban on July 20 and ordered concerned parties to engage with the central bank to consider their requests. The Supreme Court “allowed cryptocurrency exchanges, their shareholders, traders and other individuals to present their cases within two weeks to the RBI, which will look into the issue in accordance with the law,” as news.Bitcoin.com previously reported. Quartz elaborated:

The supreme court suggested that these exchanges can engage with the RBI. So, last week, a clutch of such firms sent out letters making their case against the banking regulator’s prohibitory order.

Crypto Firms’ Requests

Indian Crypto Exchanges Engage with RBI to Offer Banking Ban AlternativesVarious suggestions were presented to the RBI. According to the news outlet, some of “the bitcoin exchanges have requested the RBI to remove the blanket ban, saying the regulator should instead enforce it only on firms violating the norms.”

A petitioner explained to the publication, “we have also suggested measures that we are ready to take to improve the KYC-AML [Know Your Customer – Anti-Money Laundering] norms, such as including passport details as well. We are also ready to take any suggestion that the regulator has to offer that can address their concerns.”

Anirudh Rastogi, TRA Law’s managing partner who filed the supreme court petition representing four exchanges, told the news outlet:

A ban is counter-productive, therefore, we have suggested that there should be appropriate regulations that can address the government or the central bank’s concerns.

“Other firms have asked for an extension on the deadline,” the publication wrote, adding that it has reviewed an application submitted by Kali Digital Eco-systems Private Limited to the RBI. The document states that “considering the next date of the hearing in the supreme court is after July 06, 2018,” the firm requests the central bank “to extend the time of three months granted in the captioned circular to at least Aug. 31, 2018.”

Coping with RBI Ban

Five writ petitions have been filed, as news.Bitcoin.com previously reported. Last month, the Supreme Court mandated that no other courts shall accept any more crypto-related petitions and all existing ones were transferred to the Supreme Court.

Indian Crypto Exchanges Engage with RBI to Offer Banking Ban AlternativesIn anticipation of the RBI order taking effect, crypto exchanges in the country are increasingly moving away from fiat, creating crypto-to-crypto trading platforms. Unocoin launched a new trading platform with 15 cryptocurrencies last week. Zebpay and Koinex have both launched crypto-to-crypto exchanges.

Currently, the Indian government is working on the regulatory framework for cryptocurrencies. It has set up a committee under Subhash Garg, the secretary of economic affairs in the finance ministry, to prepare a draft crypto law.

Do you think the RBI will reconsider the ban and accommodate the requests of crypto exchanges? Let us know in the comments section below.


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Chilean Minister Supports Cryptocurrencies After Court Sided With Exchanges

Chilean Minister Supports Crypto After Court Sided With Exchanges Against Banks

The Chilean Minister of Economy has voiced his support for cryptocurrencies after the country’s anti-monopoly court ordered major banks to re-open the accounts of crypto operators. Three banks out of the 10 sued by local cryptocurrency exchange Buda have been ordered to re-open crypto exchange accounts.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Minister of Economy Supports Crypto

José Ramón Valente, Chile’s Minister of Economy, Development, and Tourism, “gave a signal of support to cryptocurrencies and those who operate them in Chile,” Diario Financiero reported on Friday and quoted him saying:

What interests us with cryptocurrencies is basically giving them the opportunity [to develop] because they are an important innovation that is happening in the world…You have to give them a chance.

Chilean Minister Supports Crypto After Court Sided With Exchanges Against Banks
José Ramón Valente.

“We cannot stay out of these innovations” or “outside of this economy of the future,” he emphasized, adding that by giving them a chance, “we are not the ones who artificially put a lock on them so they cannot happen,” the news outlet conveyed.

While advocating for giving cryptocurrencies a chance “so that they demonstrate their value,” he clarified that he does not support any parties involved in the conflict between banks and crypto exchanges. “We are not in favor [of] or against them, but simply see them as another innovation and we favor that there is this innovation, and that Chile does not close before the possible technological advances in the world,” he elaborated.

Scotiabank Next

Chilean Minister Supports Crypto After Court Sided With Exchanges Against BanksThe minister’s remarks came after the Court for the Defense of Free Competition (TDLC – Tribunal de Defensa de la Libre Competencia) ordered Banco del Estado de Chile and Itau Corpbanca to re-open the current accounts of Buda crypto exchange, formerly Surbtc.

On Friday, Diario Financiero also reported that the TDLC proceeded to issue the same order to Scotiabank to re-open the current account of another cryptocurrency operator, Cryptomkt.

Responding to the court’s order, Scotiabank said:

We excuse ourselves from issuing an opinion. However, we would like to point out that Scotiabank has high standards in the prevention of money laundering which are a regulatory requirement, which must be met by all bank customers without exception.

The bank added that in this particular case, the account was closed after the company “was asked to prove the origin of its funds, [and] it could not adequately satisfy them.”

Pablo Lorenzini, Christian Democratic Party deputy and president of the Finance Committee of the Lower Chamber, said following the TDLC’s orders, “we must legislate [cryptocurrencies] soon.”

What do you think of the Chilean Minister of Economy’s support for crypto and the court’s action? Let us know in the comments section below.


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Bitcoin Gaining Ground in Zimbabwe with a New Crypto Exchange and an In-Office BTC/USD ATM

Bitcoin Gaining Ground in Zimbabwe with a New Crypto Exchange and an In-Office BTC/USD ATM

Just a few weeks ago, the Zimbabwean cryptocurrency exchange Golix gained its first national competitor when Styx24 opened its doors online. Almost simultaneously Golix introduced a Bitcoin ATM to its customers, accessible inside their offices in central Harare.

Also read: Bitcoin Adoption Continues to Thrive Within Africa’s Borders

Need US Dollar Bills In Zimbabwe? Got BTC?

Bitcoin Gaining Ground in Zimbabwe with a New Crypto Exchange and an In-Office BTC/USD ATMFew countries have seen harder times economically, fiscally, and monetarily than Zimbabwe. No wonder Bitcoin proponents have an easy time explaining Bitcoin’s advantages to Zimbabweans. After the government famously printed Z$100 trillion dollar bills, the general population have no trouble understanding the wonders of a fixed cap coin supply.

“Since we got the machine, lots of people have come to check it out, to touch it,” Golix representative Tawanda Kembo told Bitcoin.com. “At least 10-20 people walk in every day, since we launched it last Friday”.

Neither Golix, nor Styx24 have government licenses or permits to run these businesses, as the lawmakers still have not gotten around to regulating the space. “We actually don’t know what the government thinks,” Kembo said and added:

People can use it at their own risk as there is no licensing for any crypto business yet, even though we have met with regulators several times.

The teller machine is placed one floor up, in a mall in the center of the capital, welcoming customers between the hours of 8 am and 6 pm on weekdays. It takes your photograph, fingerprint, scans your passport/ID, and verifies your phone number.

There is an acute liquidity crisis In Zimbabwe, and so getting physical US dollars is both cumbersome and expensive (and illegal, the cash has to be bought on the black market). Also, the premium to convert into Bitcoin is the highest in the world, at 40-60%. That means, if you want to buy 100 dollars worth of Bitcoin in Zimbabwe, you have to pay 40-60% extra, plus fees, usually.

Bitcoin Gaining Ground in Zimbabwe with a New Crypto Exchange and an In-Office BTC/USD ATM

Since the national currency has more or less become worthless in Zimbabwe, everybody is using US dollars. Even the bank accounts are denominated in US dollars today. Few use real physical US dollars, however, due to the extra expenses involved. Salaries are typically transferred directly to bank accounts, and people use debit cards or mobile money services to do shopping.

Golix charges a 10% fee on all transactions to be able to afford to handle physical US dollars under these conditions. Total volumes are very low, compared to other countries. Golix may exchange 2-3 bitcoins per day in total, counting both their online outlet and the ATM.

News.Bitcoin.com has reached out to our contacts in the region and we’ve gotten eye-witness reports that the Golix office machine is actually dispensing some, though usually very small amounts, physical US dollar bills to clients visiting the office.

Bitcoin Gaining Ground in Zimbabwe with a New Crypto Exchange and an In-Office BTC/USD ATMWe also talked to the founder and CEO of Golix’s newest competitor, Styx24.com, who has set up a shop only a few weeks ago. Styx24 CEO Tatenda Mubungu is currently in South Africa to fetch another ATM and set it up it in the offices in Gweru, a city situated about 30 km from Harare.

“I decided to open another exchange in my home country of Zimbabwe because monopolies are never good,” Mubungu says. With only one exchange customers have no options. Competition is beneficial for clients, it leads to lower fees and forces more innovation.”

Do you expect more entrepreneurs to join the race to bring Bitcoin closer to Zimbabweans? Share your thoughts in the comments section below.


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Cryptocurrency Exchanges in Chile Call Out Banks for Denying Them Services

Cryptocurrency Exchanges in Chile Call Out Banks for Denying Them Services

Two cryptocurrency exchanges from Chile have called on the country’s baking association (Asociación de Bancos e Instituciones Financieras or ABIF) to issue a clear position regarding the new industry. The companies took this step after a number of Chilean banks reportedly shut down their accounts just for dealing with cryptocurrencies.

Also Read: Misleading Cryptocurrency ”Partnership” Announcements Are Getting Ridiculous

Banks Taking the Law Into Their Own Hands

Cryptocurrency Exchanges in Chile Call Out Banks for Denying Them ServicesChilean cryptocurrency exchanges are fighting for their right to open a bank account in the country in order to serve clients who are switching over from fiat. BUDA and Crypto MKT have condemned the closing of their local banking accounts and said that a bank representative told them that they had instructions to “not open an account for anyone that has relation to cryptocurrencies “.

The two companies made a joint public statement warning that: “The lack of knowledge and regulatory clarity has given rise to the fact that some banks, out of fear, misinformation or perhaps by strategy, are refusing to provide their services to anyone who has any relationship with any digital asset.” Adding that “in Chile the regulation is in the hands of a few, who are acting as de facto regulators and are opting to prohibit.”

BUDA and Crypto MKT called on ABIF to “make its position transparent” and to define whether companies linked to cryptocurrencies will have access to banking services, or if the banks “are determined to prevent the existence” of the young industry. In addition, the exchanges called for both the authorities and the public to pay attention to the issue, “before it’s too late.”

Exchanges Play By the Rules

Cryptocurrency Exchanges in Chile Call Out Banks for Denying Them ServicesTo showcase how they are not a possible legal risk to the banks, the two exchanges highlighted that they “have developed safe platforms of the latest technology for the protection of their customers and have opened channels of collaboration with authorities”, in addition to explaining to the public the characteristics, advantages and risks of trading these type of assets. Both firms, they add, pay taxes, are registered with the relevant Chilean financial authorities, and follow standard prevention of money laundering and anti-terrorist financing guidelines.

Banks preventing exchanges from opening accounts is a problem in many places around the world, but legal victories are possible. Last month the Supreme Court of Israel issued a temporary injunction order forbidding the country’s Bank Leumi from sweepingly halting the account activity of the Bits of Gold bitcoin exchange.

How can exchanges in Chile bypass the banking system and still be able to receive fiat transfers from new clients? Share your thoughts in the comments section below!


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Another Thai Bank Shuts Down Accounts of Local Crypto Exchange

Another Thai Bank Shuts Down Accounts of Local Crypto Exchange

Another major Thai bank is reportedly terminating transactions involving cryptocurrencies through the bank accounts of a local crypto exchange. This decision follows a similar move by another major Thai bank, Bangkok Bank, to terminate the same exchange’s bank accounts.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

Second Bank Closes Account of Crypto Exchange

A major Thai financial institution, the state-owned Krungthai Bank, has “shut down crypto trade accounts,” the Bangkok Post reported on Monday. The bank has become the second in Thailand “to terminate transactions involving cryptocurrencies trading with Thai Digital Asset Exchange (TDAX),” a local cryptocurrency exchange.

Another Thai Bank Shuts Down Accounts of Local Crypto ExchangeThe first bank was Bangkok Bank, which decided to terminate TDAX’s accounts with the bank last week. Earlier this month, Thailand’s central bank issued a circular, asking financial institutions to refrain from getting involved in five cryptocurrency activities.

Mr. Somchai Sujjapongse, the permanent secretary of the Finance Ministry and chairman of Krungthai Bank, ordered his bank on Monday “to halt any transactions related to cryptocurrencies with TDAX through the bank’s accounts,” the news outlet elaborated, adding that:

The move followed a Bank of Thailand request that financial institutions cooperate by refraining from making or being involved in cryptocurrency transactions, as the regulatory framework supervising digital currencies remains unclear.

Another Crypto Exchange Affected

Another Thai Bank Shuts Down Accounts of Local Crypto ExchangeTDAX is a privately-owned Thai cryptocurrency exchange. According to the publication, the exchange still has bank accounts with two other financial institutions: Kasikornbank (Kbank) and Siam Commercial Bank (SCB). Last week, Kbank confirmed that it was still providing service to TDAX.

According to the Bangkok Post, a source from another major domestic cryptocurrency exchange, Bx.in.th (BX), revealed that “Bangkok Bank has already terminated the exchange’s account, but did not reveal whether the termination occurred on the same day as TDAX’s termination.” Yuthavithi Rootwararit, founder and CEO of Crypto Trading Co Ltd, said, “BX’s trading volume and value are more than ten times larger than those of TDAX.”

ICOs Postponed

Another Thai Bank Shuts Down Accounts of Local Crypto ExchangeTDAX is also preparing to launch some initial coin offerings (ICOs). However, the regulatory uncertainty has prompted the exchange to announce that its ICO plans are now postponed.

The exchange recently completed an ICO for Jfin coin by J Ventures, a subsidiary of Jay Mart Plc which is listed on the Thai stock exchange. 100 million tokens were sold at the price of 6.60 baht per token. “Jfin coin will not be affected [by TDAX’s ICO decision], as this ICO was fully subscribed to on Feb 16, while the first trading day will be held on April 2,” Mr. Poramin Insom, TDAX’s CEO and founder, was quoted by the news outlet. He added:

Although there are five or six ICOs in the pipeline, the exchange has decided to impose a two-week postponement because market participants expect the SEC to unveil its ICO regulatory framework soon…We are waiting for the ICO regulations from the [Thai] SEC.

The Thai government is in the process of establishing a regulatory framework for cryptocurrencies, which is expected “on March 8, followed by a fintech bill,” the Bangkok Post wrote. A source told the news outlet that the “ICO regulations are focused on supervising online exchanges, which will have to register themselves with the SEC.”

Do you think all banks in Thailand will follow suit? Let us know in the comments section below.


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Vouching Bitfinex and Tether’s Bank Accounts Hold Nearly $3 Billion USD

Vouching Bitfinex and Tether's Bank Accounts Hold Nearly $3 Billion USD

Zhao Dong, a prominent Chinese early bitcoin adopter and shareholder in Bitfinex, recently posted on Weibo seeking to provide anecdotal evidence as to the integrity of Bitfinex and Tether’s financial reserves. The post claims that Zhao Dong and Lao Mao, the chief executive of Big.one, have witnessed first hand the balances of Bitfinex and Tether’s respective bank accounts during a meeting with Bitfinex’s chief financial officer, Giancarlo Devasini. The post alleges that the combined bank accounts of Tether and Bitfinex hold nearly $3 billion USD.

Also Read: Rapper 50 Cent Has Millions in Bitcoin

Zhao Dong Seeks to Put Criticisms of Bitfinex and Tether’s Opaque Banking Practices to Rest

Zhao Dong

Zhao Dong, a well known Chinese early adopter of bitcoin, has published a post on Weibo claiming that he has personally seen the bank balances of Tether and Bitfinex first hand during a recent meeting with Bitfinex’s CFO, Giancarlo Devasini. Zhao Dong is a shareholder in Bitfinex, and has been described as one of China’s largest over-the-counter (OTC) traders.

According to a rough translation, Zhao Dong’s Weibo post states “Lao Mao (and I) just had a look at the USD account of Tether and Bitfinex in Giancarlo’s (Boss of BFX, CFO) room, in which Tether’s account holds 1.8x billion USD and Bitfinex holds 1.1x billion USD. The total number of the two accounts is around 3 billion USD, which is beyond the current circulated supply of USDT. This debunks all rumors around USDT.”

Big.one to Introduce USDT After CEO’s Meeting with Giancarlo Devasini

Lao Mao (left) and Giancarlo Devasini (right)

The chief executive officer of Big.one published a blog post following the trip, in which an interview between Mr. Devasini and one of Lao Mao’s associates is made public. In the interview, Bitfinex’s CFO claims that the “the team of Bitfinex has around 50 people”, and that the “Tether team does not work for money,” adding that “As an early bitcoin investor, the team has a sense of responsibility and mission.”

Seeking to quell criticisms and concerns relating to Bitfinex and Tether’s banking relationships and capitalization, Mr. Davasini also claims that the companies “are not in a position to fully disclose [their] bank accounts” as a consequence of “pressure from [the] US banking industry.” The CFO alleges that the “US banking industry is blocking Tether by various means,” adding that in future, “Tether may no longer anchor to [the] US dollar,” suggesting that the company may “use Euro, Japanese Yen, or other fiats instead.” Notably, the comments came just two weeks after Tether launched EURT – an ERC20 token intended to function as a hedging tool pegged to the value of the Euro.

The Big.one CEO concluded the post by stating “we can trust Tether and USDT,” also announcing that “Big.one will also list USDT as soon as possible.”

Lao Mao Apparently Reverses Opinion on Tether – Crypto Community Not So Easily Convinced

Zhao Dong and Lao Mao 'Vouch' That Bitfinex and Tether's Combined Bank Accounts Hold Nearly $3 Billion USDThe comments comprise an apparent change of heart for Lao Mao, who during November 2017, published a post urging exchanges not to introduce USDT pairings. At the time, Lao Mao stated “we have appointed our partner with Goldman Sachs to conduct research on USDT,” describing the results of the research as “shocking.” The report criticized the company’s lack of banking transparency, and stated that “Bitfinex, the majority shareholder of Tether, arguably has access to Tether’s deposits at any time.” The report also criticized the internal memorandum issued by Friedman LLP that, at the time of release, Tether had misrepresented – claiming that such comprised an “audit.”

Despite the ‘vouches’ from Zhao Dong and Lao Mao, the cryptocurrency community appears to have remained skeptical regarding the integrity of Bitfinex and Tether’s accounts, with one of the most upvoted comments on Zhao Dong’s Weibo post stating “You need to present [an] audit report from a third party accounting firm or lawyer. Your word doesn’t count.”

Concerns pertaining to the opaque accounting practices of Bitfinex and Tether have heightening heading into 2018, following a dramatic explosion in the number of USDT in existence. The number of USDT in circulation grew from less than 10 million on January 1st, 2017, to reach almost 1.4 billion just 12 months later – despite all banking services to Tether and Bitfinex having been cut off by Wells Fargo on March 23rd, and neither company providing definitive evidence that they have successfully restored banking relationships since. Tether has since shown no signs of slowing down its production of new USDT, with 400 million new USDT being produced in four days just one week ago.

What is your reaction to the Zhao Dong and Lao Mao’s posts vouching for the integrity of Bitfinex and Tether’s bank accounts? Share your thoughts in the comments section below!


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Korean Crypto Exchanges to Share Data with Banks in New Account System This Month

Korean Crypto Exchanges to Share Data with Banks in New Account System This Month

The South Korean government has announced that six major banks will be ready to provide services to cryptocurrency exchanges this month. Under the new system, the government requires exchanges to share user data with banks.

Also read: South Korean Officials Caught Trading On Insider Knowledge of Crypto Regulations

Exchanges to Share Data with Banks

The Korean Financial Services Commission (FSC) announced some additional details of the new real-name system for cryptocurrency accounts on Sunday. “The government plans to require cryptocurrency exchanges to share users’ transaction data with banks,” an FSC official said, as quoted by the Investor. The official emphasized:

Banks are expected to introduce the system, which will require cryptocurrency exchanges to share users‘ transaction data with banks, late this month or early next month.

Korean Crypto Exchanges to Share Data with Banks in New Account System This MonthThe new system will end the current practice of virtual account usage which allows anonymous trading of cryptocurrencies. These accounts are issued by banks for crypto exchanges’ customers to use to buy or sell cryptocurrencies at exchanges.

The regulators have banned financial institutions from issuing new virtual accounts until the new system is in place to ensure that “only real-name bank accounts and matching accounts at cryptocurrency exchanges” can be used for deposits and withdrawals, the news outlet described.

6 Banks to Introduce New System on January 30

The FSC’s announcement stated that 6 commercial banks including Nonghyup Bank, Industrial Bank of Korea, KB Kookmin Bank, and Shinhan Bank will have the new system in place from January 30, according to the Digital Times. Initially, the system was expected to be implemented around January 20. The publication quoted an FSC official detailing:

Six commercial banks that have supported virtual currency transactions will establish a deposit and withdrawal system to convert [to] the virtual money real-name system and provide full-fledged services from the 30th.

However, this new service “is targeted at existing virtual account users, and the opening of new accounts will [still] be suspended for the time being,” the publication noted.

Anti-Money Laundering and Taxation

Korean Crypto Exchanges to Share Data with Banks in New Account System This MonthFollowing the inspections of 6 major South Korean banks, the Financial Intelligence Unit (FIU) is preparing anti-money laundering (AML) guidelines related to cryptocurrencies.

The real-name system will be AML compliant. It is “expected to block illegal funds from money laundering as well as to filter out minors for whom virtual money investment is prohibited,” the news outlet conveyed. Banks have AML obligations which will require them to check and maintain transaction records of cryptocurrency traders.

Furthermore, the new system will allow the government to “grasp the virtual currency transaction information to some extent through the bank,” the news outlet noted, adding that:

As the government is able to access virtual currency transaction information, it will speed up taxation based on this information.

What do you think of this new system? Let us know in the comments section below.


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Commission Income From Crypto Accounts Jumped 36 Times for South Korean Banks

Commission Income From Crypto Accounts Jumped 36 Times for South Korean Banks

South Korean banks have been providing virtual account services to cryptocurrency exchanges and earning commissions from them. According to data obtained by the country’s Financial Supervisory Service, banks made 36 times more in commission income from crypto exchanges last year than the previous year.

Also read: South Korean Officials Caught Trading On Insider Knowledge of Crypto Regulations

Banks Earned 36x More From Crypto Accounts

Commission Income From Crypto Accounts Jumped 36 Times for South Korean BanksThe Korean Financial Supervisory Service (FSS) has obtained data from banks relating to their virtual account services to crypto exchanges. It includes data from the six banks inspected by the regulators last week: Woori Bank, KB Kookmin Bank, Shinhan Bank, Nonghyup Bank, Korea Development Bank, and Industrial Bank of Korea.

The agency revealed on Thursday that the total commission income banks earned from these services last year was 2.221 billion won (~USD$2.1 million), which is 36 times more than the 61 million won earned the previous year, Yonhap reported.

Upbit’s Bank Tops the List

Commission Income From Crypto Accounts Jumped 36 Times for South Korean BanksBanks make money from cryptocurrency exchanges by charging them approximately 200 to 300 won per customer deposit, the news outlet detailed, adding that crypto traders pay higher commissions to the exchanges when withdrawing funds.

According to the FSS, the Industrial Bank of Korea earned the most from virtual account services last year. The bank provides these services to Upbit, which has recently become the world’s largest exchange by volume. Upbit is backed by Kakao Corp, the operator of South Korea’s most popular chat app, Kakao Talk. The bank “earned a total of 675 million won by setting a virtual account fee of 300 won per deposit,” the publication conveyed.

Commission Income From Crypto Accounts Jumped 36 Times for South Korean BanksThe bank with the second highest commission income from crypto-related services is Nonghyup Bank which provides virtual account services to Bithumb and Coinone. The bank earned 654 million won from these services last year.

Shinhan Bank provides virtual account services to a few crypto exchanges including Bithumb and Korbit, bringing it 621 million won last year. Kookmin Bank made 155 million won, the Korea Development Bank made 61 million won, and Woori Bank earned 59 million won from crypto exchanges last year.

Currently, the South Korean government has mandated banks to stop issuing new virtual accounts until they have installed the new a real-name identification system. Banks will also be required to check the purpose of trading and the source of funds for each crypto account holder.

What do you think about banks charging these fees for cryptocurrency accounts? Let us know in the comments section below.


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