Bithumb to Ban Foreign Traders Failing Mobile Phone Identification

Bithumb, one of top 4 crypto exchanges in South Korea, announced recently that foreign nationals who fail to pass mobile phone identity verification would be unable to use its services since it is prepraring to follow stricter rules for the Korean crypto industry to take effect by Sept. 24.

The country's revised Special Funds Act took effect on March 25 and will be enforced after a six-month grace period. It requires domestic crypto exchanges to register with the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC). They also have to cooperate with local banks on the implementation of the real-name accounts system.

Although Bithumb's Sept. 1 notice is addressed to "foreigners living abroad," it also states that foreign nationals "residing in Korea" who cannot verify their identity via mobile phones cannot use the platform. According to the Korea Herald's report on the matter, the traders should perform the procedure through "Korean mobile phones" and "regardless of where they live." The publication also notes that Bithumb has already stopped onboarding foreigners without alien registration cards.

The exchange further warned affected users they should withdraw their assets, without specifying any dates. According to the notice, services will be terminated "within 2021 (when customer confirmation becomes mandatory)." The trading platform promised to notify users again "when customer verification is mandatory and policy changes are made."

The English-language Korean daily quoted a Bithumb official who said the company was taking final steps before applying for registration with the Financial Intelligence Unit, South Korea's main anti-money laundering body. 

In early July, 2021, Bithumb banned its staff from trading cryptocurrencies ​on its own platform.