South Korea's major cryptocurrency exchanges—including Upbit, Bithumb, Korbit, and Coinone—will implement a ban on transfers to unverified private wallets by March 25, 2025, in compliance with new anti-money laundering (AML) regulations.
Key Details
- Policy Origin: Coinone became the first exchange to announce this measure, effective January 24, 2025, to mitigate money laundering risks.
- Industry-Wide Adoption: All 23 licensed Korean exchanges must enforce similar policies by the government’s deadline.
- Verification Requirement: Users must complete identity verification (KYC) to deposit/withdraw funds.
Government Rationale
The Financial Services Commission (FSC) mandated stricter wallet tracking to align with global AML standards. Exchanges failing to comply risk penalties or license revocation.
Implications for Crypto Traders
Withdrawal Restrictions:
- Transfers to non-KYC-compliant wallets (e.g., cold wallets) will be blocked.
- Verified exchanges or institutional wallets remain accessible.
Impact on Decentralized Finance (DeFi):
- Users moving funds to DeFi platforms must ensure recipient wallets are exchange-registered.
Alternatives:
- Consider transferring assets to compliant international exchanges before the deadline.
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Frequently Asked Questions (FAQs)
Q: Can I still use hardware wallets?
A: Only if they’re linked to a verified exchange account. Direct transfers to unregistered cold wallets will be prohibited.
Q: How does this affect foreign traders?
A: Non-Korean users on Upbit/Bithumb must complete KYC to continue withdrawals.
Q: Will this policy reduce market liquidity?
A: Short-term volatility is possible, but long-term regulatory clarity may attract institutional investors.
Q: Are decentralized exchanges (DEXs) affected?
A: No—this applies solely to centralized Korean platforms.
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