Virtual Asset Exchanges: Is the 'One Exchange-One Bank Account' Rule Here to Stay?

New administration likely to maintain current regulations

Multiple partnership strategies under review

Complex calculations for exchanges and banks

With President Lee Jae-myung taking office, it has become increasingly likely that the government will maintain the principle of linking cryptocurrency exchanges and banks through a one-to-one real-name KRW deposit/withdrawal account. The new administration appears to have decided to postpone easing regulations. This is expected to complicate the strategies of exchanges and banks reviewing new partnership options.

According to industry sources on the 5th, President Lee promised to allow the trading of spot Bitcoin ETFs and lower crypto transaction fees during this election; however, his pledge did not mention the 'one exchange, one account' rule. This is being interpreted as an inclination to maintain the current regulations.

Industry players who had hoped for multiple bank partnerships have expressed disappointment, as having more partners could result in an influx of new customers. The progressive approval of corporate crypto trading by regulators was also seen as an opportunity, especially since the Financial Services Commission recently approved cryptocurrency trading for nonprofit corporations meeting specific conditions.

This is why attention is focused on Upbit, the number one crypto exchange in Korea. Many expected Upbit to consider partnerships with major commercial banks, as K Bank, its current partner, has relatively few corporate customers. In this situation, it has become difficult to link multiple accounts. Dunamu, which operates Upbit, is set to see its contract with K Bank expire in October, but plans to extend the agreement. An industry official stated, "Considering the time required to establish IT systems, the contract will likely be extended even for a short period," adding, "However, if the current regulations remain unchanged next year, a partner change could be considered."

Changing the partner bank is expected to be a challenging process. A considerable number of customers would have to go through the hassle of opening and linking new accounts. Korea Financial Intelligence Unit (FIU), which handles notifications for changes in virtual asset business operators, has also taken a negative stance towards Bithumb's account change. FIU reviewed whether to grant approval very strictly, citing concerns about possible financial incidents.

By Jinseong Kim, jskim1028@hankyung.com