The South Korean financial authorities rejected the proposal of \”allowing securities companies to issue encrypted asset real-name accounts\”

On March 3, the South Korean financial authorities decided not to expand the issuing institution of the encrypted asset real-name account required by the encryption exchange to outside the bank. People in the financial industry have put forward a plan to allow securities companies to issue encrypted asset real-name accounts, but the financial authorities of the country said that compared with banks, securities companies and other financial companies have relatively low ability to prevent money laundering. In addition, in the event of losses and closure of the exchange, the financial companies that open accounts may also have various burdens, so it is necessary to be responsible by institutions with sufficient financial capacity. In addition, allowing securities companies to issue real name accounts for virtual assets runs counter to the strict policy orientation, and due to the proliferation of exchanges that can trade Korean won, investment foam may occur.

Interpretation of this information:

The recent decision by South Korean financial authorities to not expand the issuing institution of encrypted asset real-name accounts required by encryption exchange is a move that has elicited varied interpretations from concerned parties. However, it is clear that the decision aims to curb the risks of money laundering, losses, and closure of accounts associated with securities companies and other financial firms.

The financial industry in South Korea had proposed allowing securities companies to issue real-name accounts for virtual assets, but the authorities rejected this proposal. Their reasoning was that banks had a higher ability to prevent money laundering than securities companies, which implies that the latter pose higher risks to investors. Furthermore, in the event of exchange closure or financial losses, the financial companies that open accounts may also face various burdens. It is, therefore, necessary for only institutions with sufficient financial capacity to assume such responsibilities.

This decision by South Korean financial authorities not to expand the issuing of encrypted asset real-name accounts to securities companies aligns with the country’s strict policy orientation on this matter. The proliferation of exchanges that can trade Korean won has led to the possibility of investment froth, which further supports a need for robust measures against money laundering and other financial risks. Cryptocurrency trading poses a real threat to financial systems worldwide, and measures to curb it are commendable.

In conclusion, the South Korean government has made a wise decision that prioritizes the safety of its citizens’ investments. Allowing securities companies to issue encrypted asset real-name accounts would have increased the risk of money laundering, losses, and closure of the exchanges. Additionally, the country’s strict policy orientation on this issue, with the proliferation of exchanges that can trade Korean won, has made it necessary to take even more rigorous measures to prevent investment froth. The decision may limit market possibilities, but it protects investors and strengthens the credibility of financial systems in South Korea.