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31 Dec 2021

Coinone, part of "Big Four crypto exchanges in South Korea, announced Wednesday that with effect from January 24, 2022, it will no longer allow withdrawals to non-verified external wallets. The move is reportedly to ensure that customers are not using crypto for illegal activities such as money laundering. Hence, it requires customers to register their wallets to be able to withdraw funds. The other big Korean crypto exchanges, including Upbit, Bithumb, and Korbit, may announce similar restrictions aimed at combating money laundering. 

To transfer to external wallets users will have to register their external wallets with the exchange, or else they will no longer be allowed to withdraw their funds held at their exchange accounts. 

External wallets include any wallets that third parties offer, including "hot" (online) and "cold" (offline) storage options. But these wallets must be registerable or verifiable, i.e., they must have know-your-customer (KYC) information in place. "It is impossible to register a wallet address that cannot verify identity information," said Coinone.

Coinone customers need to submit information such as their full name, email addresses, and registered mobile phone number in order to verify their wallets. This information must be the same as the information recorded in Coinone. That means customers cannot register someone else's wallets.

"If you need to withdraw Coinone's virtual assets to another virtual asset wallet from January 24, 2022, in accordance with the fulfilment of the customer verification system obligation, you must register the wallet address to be able to withdraw," said the exchange in a press release. 

Since wallets such as Metamask and Ledger do not require KYC and users may not be able to transfer to these wallets from Coinone. Custodial wallets maintained with exchanges like Binance and FTX require KYC and can be verified with Coinone.

Seoul regulators have taken a series of measures to curb illegal crypto transactions. More recently, the country's crypto exchanges were mandated to various requirements such as data maintenance, internal controls, reporting suspicious transactions, and performing KYC to verify customer identities.

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