One of the top three crypto exchanges in Korea, Coinone, has announced that users will no longer be able to withdraw their funds to any yet-to-be verified external wallets soon. The announcement is part of a move to comply with Korean authorities’ new crypto regulatory policy.

Coinone’s New Crypto Policy

The popular Korean exchange announced the new policy will take effect beginning from January 23, 2022. Under this new policy, Coinone customers would now be disallowed from withdrawing their funds into Metamask, Ledger, or any other external wallet that doesn’t make a know-your-customer (KYC) registration mandatory.

However, the exchange has given a 24-day ultimatum for users to find and register with external wallets that require a KYC registration. Part of the exchange’s announcement reveals that “once this ultimatum expires, withdrawing to any unregistered wallet would no longer be allowed. Hence, each user must comply with this notice.”

The exchange’s customer support webpage explained that the new policy would curb the illegal use of Coinone’s virtual asset services, especially unlawful financial transactions. “Each user’s details are properly cross-checked to ensure that they can be tracked in case they perform any suspicious activity,” the webpage concluded. 

Fraudulent Transactions And Tax Defaulters

Korean authorities keep implementing various techniques to reduce crypto-related fraudulent transactions to the barest minimum. Six months ago, the government issued a warning notice to all Korea-based crypto exchanges that they must implement a KYC policy for their customers or risk jail time and hefty fines.

A couple of months later, the government also implemented a new law that empowers tax authorities to withhold digital assets of tax defaulters even if they hold such digital assets in their wallets. Hence, it is no wonder that Coinone is updating its terms of service, especially as it relates the customer verification, to avoid having issues with the financial regulators.

However, most exchanges (especially the other top ones such as Korbit, Upbit, and Bithumb) are yet to follow the steps of Coinone, and it is to be seen whether they will face punishment for their disobedience.

Stricter Crypto Regulation In Korea

After shifting the implementation of taxing crypto gains to next year, Korean authorities have announced a new crypto policy that forbids google and apple pay from rewarding players that participate in crypto-related games with game items. Korean authorities have informed the two tech giants to remove such games from their respective app stores.

Gamers usually sell their winning game items as NFTs to earn some cash. The Korean government has long been against the availability of play-to-earn games on play stores because they categorize it as a form of gambling which the Korean Game Promotion Act forbade.

This move will likely cost the game creators billions of dollars and users as Korea’s blockchain gaming industry is reputed to be one of the biggest globally. Apart from internationally recognized blockchain games, the Korean blockchain gaming industry has also been growing in leaps and bounds. Korean authorities are doing the most in ensuring that Koreans can’t perform any crypto-fiat transaction.