Korean cryptocurrency exchanges face shutdown on stricter rules

Small-scaled cryptocurrency exchanges in South Korea are under threat of shutdowns for incompliance with the law to legitimize virtual money trade only on those who register customer trade backed by their real-name bank accounts.

According to industry sources on Thursday, under the revised regulation called the Act on Reporting and Using Specific Financial Transaction Information, cryptocurrency exchanges are required to report their entity name and business head to the Financial Intelligence Unit, a state watchdog to prevent money laundering and other illegal activities. Any violation is subject to a jail term of up to five years or a penalty of up to 50 million won ($40,000).

The law is meant to close cryptocurrency exchanges with no real name bank account system certified by partner banks. The real name bank account system is part of the government`s measures to curb speculative investment into virtual coins by ensuring only eligible real-name bank accounts and matching…