The South Korean financial regulatory body, the FSS, has been unable to enforce the proposed anti anonimity policies in this first quarter, according to an article first published in Bitcoin.com.
The FSS (Financial Supervisory Service), the South Korean regulatory watchdog that examines the compliance of laws by all the financial institutions in the country, under the mandate of its overseer, the Financial Supervisory Commission. It was established in 1999 to consolidate a central supervisory system that would help to consolidate all the regulatory efforts in the country.
The FSS declared earlier this year, when there were rumors of a possible ban on cryptocurrency trading, that they would allow this activity only if it was performed “normally“. Many did not understand the meaning of this statement, but later they clarified that they were referring that people should give his real name and ID to exchanges, effectively banning anonymous trading. This was announced in February.
But three months later, still most South Korean Exchanges have not adopted the proposed system by the FSS. The problem, according to the source, is that most banks have not converted to the real name system that was accorded. To clarify, the regulation states that every person that does trading must register a bank account with his real name in the exchange to trade legally. The problem is that banks are only issuing accounts to the four biggest exchanges in Korea: Upbit, Bithumb, Coinone, and Korbit.
The other exchanges manage its trading operations through its own banking accounts. This has led to this exchanges to operate in a pseudo-legal way because even if they try to comply with regulations, for them it is impossible to force banks to open the bank accounts needed for operating legally. And in a more serious matter, there can be cases of identity mirroring and theft in the open, still not being detected. About this, Hong Ki-hoon, a Hongik University professor stated that:
I THINK THAT THERE WILL BE ABUSE CASES WITH NAME ACCOUNTS SUCH AS ONE PERSON USING A REAL NAME ACCOUNT AND THIS PERSON ACTING ON BEHALF OF ANOTHER PERSON.
The problem is that the FSS is in crisis right now with his last chairman resigning due to an investigation of the acceptance of donations from institutions he oversaw. The new head, Mr. Yoon Suk-heun, will have to take the helm to address these problems and regain the people’s trust in the institution.