Category Archives: Cryptocurrency exchange

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Bithumb Bans Users from 11 ‘High-Risk’ Countries

South Korea’s largest exchange Bithumb will no longer be accepting new users and removing existing ones from 11 countries presently under investigation by the Non-Cooperative Countries and Territories (NCCT) Initiative. Countries included on the NCCT list are North Korea, Iran, Iraq and Sri Lanka. This was announced by Bithumb on 27 May and reported by local news outlet Yonhap News on 28 May.

Global responsibility

Outlining the move, Bithumb says it is acting as part of “global anti-money laundering efforts”, later adding that “NCCT users will be prevented from using the exchange so that cryptocurrency is not used to fund international terrorism”.

NCCT countries are ones that have been identified by the Financial Action Task Force on Money Laundering (FATF) as being regions which are lacking significant anti-money laundering policies and regulations, as well as their use of these funds for illegal operations.

Bithumb is the largest cryptocurrency exchange in South Korea and fifth largest in the world by trading volume. Taking this stance reveals the intents of the trading giant; to remain compliant not only with the laws and regulations within South Korea but also with that of the global community, reducing the risk of any conflicts with local and international regulators.

Furthermore, to reinforce this, the development team at Bithumb are soon to implement new procedures for foreign users, requiring them to undergo a mobile verification process, preventing users from being able to falsify personal information such as their address.

A Bithumb spokesperson told Yonhap, “The Bithumb team will voluntarily impose strict policies and cooperate closely with local financial authorities to increase the transparency in the cryptocurrency market and protect investors. With progressive voluntary policies, Bithumb will improve the global standard of cryptocurrency exchanges.”

Efforts elsewhere

The regulatory wheel is spinning at quite some pace all over the world. Discussions of how to classify cryptocurrencies for purposes of taxation and regulation frequently appear in the news and the recent move by Bithumb is reflective of this crucial period in the industry.

Cryptocurrencies and initial coin offerings are two facets of the blockchain industry that have regularly faced scrutiny from all corners of the globe. India, for example, had previously and very cautiously approached the technology, but is moving toward creating the necessary taxation framework to thwart illicit cryptocurrency activities.

Recently, the European Union introduced know-your-customer regulations to cryptocurrency exchanges, which are a means also to counter crypto-related illegal activities that are often enabled by the anonymous nature of cryptocurrencies. France has been a leading force in the European crypto industry, with positive regulation discussions and taxation law reviews that paint a bright future for the industry.

The latest move by Bithumb should reinforce the efforts made by the global community. The South Korean exchange’s latest action is rather significant considering the country’s increasingly positive blockchain industry developments.


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New KYC Regulations in EU Validate Crypto Trading

In an effort to prevent financial transgressions, the European Union now requires cryptocurrency exchanges to apply know-your-customer (KYC) policies, similar to that required by traditional banks in a move beneficial to the legitimacy of cryptocurrency trading.

Crypto crime prevention

The anonymity surrounding cryptocurrency trading is viewed by many as an enabler of fraudulent activities, money laundering, and terrorist financing. As reported by Reuters, increasing the transparency required by exchange platforms is valuable in countering any negative perceptions around the usage of cryptocurrencies.

With all investors in the industry now required to provide proof of identity when joining exchange platforms in the EU, this will make it significantly easier for law enforcement to trace any cryptocurrency users involved with illicit activities. It also increases the difficulty for potential hackers to access online wallets or exchanges.

The regulation from EU legislators should not be interpreted as a condemnation of cryptocurrencies; on the contrary, it is a move to legitimize and regulate the market for the benefit of investors, and the economy.

Not all those in the crypto sphere are a fan of KYC barriers though, as it goes against the concept of anonymity, the philosophical foundation behind blockchain technology. With incognito transactions being conducted, however, there always runs the risk of fraudulent activity, despite less than 1% of Bitcoin transactions to exchanges found to be guilty of this.

Pursuing blockchain

The EU signed a Declaration on the Establishment of a European Blockchain Partnership on April 10, with the aim of establishing the continent as an international leader in blockchain technology. As reported by Bitcoinist, the partnership claims to be a ”vehicle for cooperation amongst Member States to exchange experience and expertise in technical and regulatory fields”.

The regulatory move from the EU follows the continued pursuit of anti-money laundering and terrorist financing policies targetting many areas of finance and traditional banking, not merely restricted to cryptocurrencies.


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Israeli Court Overturns Bank’s Refusal of Crypto-Related Transaction

Israel’s largest bank, Bank Hapoalim, has been found to have unlawfully blocked a money transfer of USD 195,00 coming from a European cryptocurrency exchange platform, citing unsubstantiated claims of suspected money laundering and terrorist financing.

The case was presided over by Judge Limor Bibi, who concluded that Bank Hapoalim did not have any substantial evidence to back up their accusations of the exchange platform, as reported by Coingeek. Furthermore, the client in question had even provided documents showing both evidence of the source of the funds and details of the transactions having been filed with the Israel Tax Authority.

Upon proof that the funds were AML compliant, Bank Hapoalim was obliged to facilitate the transaction. Although the bank requested a gag order to protect the bank from bad publicity, the court declined this appeal.

In a comment made by the complainant’s law firm, Doron, Tikotzky, Kantor, Gutman & Amit Gross, the growing friction between financial institutions and clients was noted. This can be attributed to the refusal of Israeli banks to cooperate professionally with clients dealing in cryptocurrencies.

The firm spoke out, saying: “Recently, we have witnessed an extreme escalation in the banks’ fight against Bitcoin and the other virtual currencies. In what appears to be a planned policy of targeted assassination, the banks are preventing their customers from returning foreign money originating in virtual currencies to their Israeli accounts, even though the clients wish to declare the movement of the funds and pay their taxes according to the law.”

The statement detailed the importance of setting a precedent that necessitates a policy of cooperating with virtual currency transactions that are AML compliant.

Bits of Gold v. Leumi Bank

Israel’s Supreme Court was forced to step in earlier this year in the case of cryptocurrency exchange Bits of Gold v. Leumi Bank. The court decision ruled in favor of Bits of Gold, declaring there was no solid ground for the bank to suspend the account in question. An order from the court was issued, temporarily prohibiting the bank from restricting the exchange’s banking services.

At the time of ruling it was appreciated as a landmark win for cryptocurrencies in the country, setting a precedent that prohibits banks from refusing services that are involved in crypto without cause. It appears, however, that the challenge from banks in Israel is far from over.


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NY Crypto Exchanges Probe Continues Despite AG’s Resignation

New York Attorney General Eric Schneiderman has resigned, a mere three hours after an article in The New Yorker brought to light accusations of physical abuse from four women that he was intimately involved with. According to correspondence between Coindesk and the New York Attorney General’s office, a probe that Eric Schneiderman launched to investigate 13 different cryptocurrency exchanges continues despite his resignation.

The Virtual Markets Integrity Initiative was launched by the ex-Attorney General on 17 April 2018, only a few weeks before his resignation. It sent official letters from the New York Attorney General’s office requesting information from 13 cryptocurrency exchanges including (1) Coinbase, Inc. (GDAX); (2) Gemini Trust Company; (3) bitFlyer USA, Inc.; (4) iFinex Inc. (Bitfinex); (5) Bitstamp USA Inc.; (6) Payward, Inc. (Kraken); (7) Bittrex, Inc.; (8) Circle Internet Financial Limited (Poloniex LLC); (9) Binance Limited; (10) Elite Way Developments LLP (; (11) Gate Technology Incorporated (; (12) itBit Trust Company; and (13) Huobi Global Limited (Huobi.Pro).

Information requested fell into six categories including ownership and control, basic operations and fees, trading policies and procedures, outages and other suspensions of trading, internal controls, and privacy and money laundering. This probe intends to increase transparency and to provide traders and investors with the information they need to assess the fairness, security, and integrity of cryptocurrency exchanges.

The cryptocurrency exchanges in question were required to submit information by 1 May 2018, and most of them seemed open to complying despite the short two-week deadline. At least one exchange, Kraken, refused to send any information to the New York Attorney General’s office. The CEO of Kraken, Jesse Powel, said he was happy that Kraken got out of the New York market in 2015 when the BitLicense was enacted so he did not have to deal with this inquiry.

The New York BitLicense is known as being one of the harshest cryptocurrency laws in existence, effectively outlawing all Bitcoin dealers and cryptocurrency exchanges who don’t have the license, which requires significant legal costs. So far, since the law was enacted in 2015, only four companies have been granted the BitLicense.

New York started its reputation of being extremely harsh on cryptocurrency activity with the BitLicense and continues it with the Virtual Markets Integrity Initiative, and it is appears this anti-crypto policy will continue regardless of the resignation of its attorney general.

Schneiderman had been an avid proponent of the #MeToo movement where women that have been abused by wealthy and powerful men have been going to the media for justice. He himself recently issued a lawsuit against famous film producer Harvey Weinstein for sexual assault.


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