South Korea to ban privacy coins from Q1 2021
South Korea will ban privacy wedges like Monero and ZCash.
Crypto exchanges in South Korea must remove these darks coins from their platform by March 21, 2021.
Privacy wedges remain in the sights of financial regulators around the world.
Privacy coins or wedges like Monero (XMR) and Bitcoin Trader will become illegal in South Korea from March 2021.
This is the latest attack on the encryption and privacy of these coins, as regulators enact laws targeting such protocols amid heightened efforts to combat money laundering (AML).
The “dark coins” on the gallows in South Korea
According to a report in the Asia Times of 18 November, South Korean regulators should prohibit confidential currency corners. As of March 21, 2021, crypto exchanges in the country will no longer be allowed to list privacy-focused crypto coins such as Dash (DASH), XMR, and ZEC.
Commenting on the reason for the ban, the country’s Financial Services Commission (FSC) revealed that these “dark coins” were popular among cybercrime syndicates and money launderers.
According to the FSC, unlike mainstream cryptos like Bitcoin :
Privacy wedges add a third-party process that hides these transaction records, thus making the parties involved completely anonymous and also making it extremely difficult for law enforcement to locate them.
South Korea now joins Japan as the second country to specifically ban privacy corners. Countries like Bolivia, Morocco, and Pakistan have blanket bans on all forms of cryptocurrency.
For the FSC, the ban on confidential digital parts is part of the government’s efforts to fight money laundering. The move also fits within existing laws on cryptocurrency trading in countries that prohibit anonymous accounts for users of cryptocurrency exchanges.
In March, the South Korean parliament passed landmark regulations that formally legalized crypto trading in the country . However, the new law came with a provision stating that exchanges work with banks to ensure the use of “real name accounts”.
Some crypto exchanges in the country have already removed privacy corners from their trade catalogs. As previously reported by BeInCrypto.com, OKEx Korea has removed five dark corners of its platform in September 2019.
Besides banning privacy wedges, South Korean authorities are also working on other crypto-focused regulations. In October, reports pointed to plans to create a virtual asset trading law that would include provisions such as exemptions for certain utility tokens.