Bithumb, the leading exchange in South Korea has banned crypto trading in 11 countries among them Iraq, Iran and North Korea. The company says the move was motivated by the need to seal loopholes for money laundering.
Complying with anti-money laundering requirements
The exchange in an announcement on Monday indicated that it is complying with international norms with regards to combating money laundering. Bithumb say that it will block all transactions originating from countries that have been are on the Non-Cooperative Countries and Territories (NCCT) blacklist.
From a business perspective, this is a very difficult step taken by the exchange as it is likely to weigh in on its user base. Investors from the said countries will no longer be able to access the platform or conduct business on it starting June 21. Existing investors will have their accounts closed down.
The Non-Cooperative Countries and Territories (NCCT) blacklist
The inter-governmental Financial Action Task Force (FATF) has blacklisted 11 countries terming them as Non-Cooperative Countries and Territories (NCCT). These countries have in a way failed to fully or partially to comply with international laws put in place to prevent money laundering, funding of terrorist plus other practices that are regarded as a threat to the global financial system. Other countries on the list include Yemen, Vanuatu, Tunisia, Trinidad and Tobago, Sri Lanka, Iraq, Iran, Syria, Ethiopia, Herzegovina and Bosnia.
The countries, in addition to North Korea, include Bosnia and Herzegovina, Ethiopia, Syria, Sri Lanka, Trinidad and Tobago, Tunisia, Vanuatu and Yemen.
The exchange indicated that handles large volumes of digital currency trade. It added that the decision to tighten its hold on international anti-money laundering policies came as a result of recommendations from the Korean Blockchain Association and the authorities of the South Korean Government.
The Korean Blockchain Association is a regulatory body that was established at the end of 2017. Its mandate is to establish and uphold ethical standards so as to foster transparency in the country’s cryptocurrency industry. Currently the group has a total of 66 members, among them 25 of the leading digital currency exchange in South Korea.