Bithumb will reportedly resume offering services to new accounts from as early as this week, following confirmation of a partnership with NH Bank which will lift the restrictions on the firm.
The troubled South Korean cryptocurrency exchange, the second biggest in the country after UPBit, is preparing to sign the deal on Aug. 30, which will see NH Bank providing virtual bank accounts to new Bithumb customers.
Under South Korean law, cryptocurrency exchanges must operate through virtual bank accounts, so investors don’t have to route through their own banks, in measures designed to ensure efficiency and security in crypto transactions. But after relations between Bithumb and its partner bank broke down, the firm was forced to suspend new accounts while new arrangements were put in place.
The move, combined with a high profile hack at the exchange, saw plummeting profits and trading volumes, with both deposits and withdrawals ruled out for a month over the duration of these events.
At the time, NH Bank said it had decided not to renew its partnership with Bithumb over concerns about the firm’s compliance standards.
“We have decided not to renew the contract because Bithumb still has problems in protecting consumers and information and preventing money laundering,” according to the South Korean bank.
However, it was reported that the South Korean government recently approved Bithumb, as well as a number of other leading exchanges, as having sufficient security systems in place, thought to have been in part responsible for the renewed agreement with NH Bank.
The return of trading through the Bithumb exchange is expected to lead to significant capital inflows in the medium term, as new investors gain access to the Bithumb exchange and the liquidity it offers.
Without the partnership with NH Bank, Bithumb was liable to an order from the South Korean authorities to cease all cryptocurrency activities, which could ultimately have forced the business to permanently close its doors.
For the embattled company, the news comes as an essential lifeline, and an important reversal of the trend of negative news from the Bithumb exchange over the last few weeks.
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