Anti-money laundering protections

Bithumb ramps up anti-money laundering protections

South Korean digital currency exchange Bithumb has introduced a number of new measures to tighten the use of its platform, in a bit to shore up its anti-money laundering protections.

The new measures include enhanced Know-Your-Customer verification processes, as well as the introduction of new specialized blockchain intelligence technologies, according to local media reports.

The exchange has also brought in new trading restrictions on accounts linked to countries thought to be too lax in tackling money laundering and financial crimes.

The leading exchange, which currently supports over 1 million daily users exchanging some $4.4–6.2 million of daily volume, has been subject to ongoing investigations in connection with fraud allegations in recent months.

As a result of its troubled 2020, Bithumb had been rumored to be a target for acquisition, with gaming group Nexon denying it had planned to acquire the company earlier this year. Local media reports also suggest more recent interest from JPMorgan and CME Group in acquiring a majority shareholding in the firm.

Bithumb will now work with industry partners Octa Solution, Chainalysis and Dow Jones Risk & Compliance in implementing new anti-money laundering technologies.

The new tougher measures will see accounts linked to countries on the Financial Action Task Force’s (FATF) “increased monitoring” list, as well as those identified as “high-risk jurisdictions,” facing restrictions on their ability to trade through the platform.

The increased monitoring list includes Myanmar, Barbados, Iceland and some 15 other countries, with high risk jurisdictions covering North Korea and Iran. 

The measures come as authorities in South Korea are set to introduce a 20% tax on digital currency trading profits, despite widespread opposition to the policy among digital currency users and stakeholders in the country.

New legislation coming into force in March will also result in a raft of new compliance obligations for digital currency exchanges in Korea, including tightening the controls on money laundering.

See also: CoinGeek Live presentation, Blockchain Intelligence: Analytics, Forensics & Compliance Tools for Bitcoin SV

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