Seoul probes banks’ virtual currency accounts

Seoul probes banks’ virtual currency accounts

Seoul probes banks’ virtual currency accounts

South Korea’s financial regulator yesterday said it is jointly carrying out inspections on six local banks that offer virtual currency accounts to institutions amid growing concerns increasing use of assets like bitcoin could lead to a surge in crime.

The joint inspection by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) will check if banks are adhering to anti-money laundering rules and using real names for accounts, FSC Chairman Choi Jong-ku told a press conference.

“Virtual currency is currently unable to function as a means of payment and it is being used for illegal purposes like money laundering, scams and fraudulent investor operations,” said Choi.

“The side effects have been severe, leading to hacking problems at the institutions that handle cryptocurrency and an unreasonable spike in speculation.”

The six banks named by the regulator are NH Bank, Industrial Bank of Korea, Shinhan Bank, Kookmin Bank, Woori Bank and Korea Development Bank. NH Bank and Shinhan Bank representatives declined to comment, while the other banks could not be reached.

Bitcoin and other virtual coins have been extremely popular in South Korea, drawing wide investments from housewives and students.