Bithumb, South Korea’s largest cryptocurrency exchange will ban digital asset trading with investors in Iran, Iraq, North Korean and eight other countries that are considered as high-risk jurisdictions by the Non-Cooperative Countries and Territories (NCCT) Initiative because of concerns over money laundering through cryptocurrency trading.
As well as being the largest crypto-currency exchange in South Korea, Bithumb ranks sixth in the world in terms of trading volume and its decision is expected to have a ripple effect across the entire crypto-currency world. The company announced on May 27th that it has decided to ban trading in the 11 countries monitored by the NCCT Initiative to prevent its infrastructure and platform from being used to launder money and any international finance, terror or criminal activities.
Bithumb said that it will not accept new users from the 11 countries on the NCCT Initiative’s list and will disable the accounts of users from those countries on June 21. The NCCT’s list is based upon countries with insufficient policies to restrict money laundering and illegal financial activities. In order to prevent future fraud, Bithumb will have foreign users undergo a mobile verification process that ensures personal information and residential addresses are accurate.
The announcement by Bithumb comes after the additional shock to the South Korean crypto-currency market earlier in May when a South Korean prosecutors announced they were investigating Upbit, another South Korea crypto-currency exchange on fraud charges.
After news of Upbit’s investigation spread, prices for crypto-currencies, including Bitcoin, Bitcoin Cash, Eos, Ethereum, Litecoin and Ripple declined by more than 10% and it was estimated that $11 billion USD worth of Bitcoin value was loss because of the news.
The Seoul Southern District prosecutors’ Office announced that it raided Upbit’s offices in Seoul in order to collect evidence that supports their allegations of fraud and manipulation of private digital records. The prosecutors seized accounting books and computer hard disks and believe that Upbit sold more cryptocurrencies than the amounts they had reported. Prosecutors plan to investigate whether Lee Suk-woo, the legal representative of Dunamu that operates Upbit, is involved in the matter.