“With growing concerns over money laundering through cryptocurrency trading, Bithumb, South Korea’s biggest cryptocurrency exchange, will ban digital asset trading with investors in North Korea, Iran, Iraq, and eight other countries that are considered as high-risk jurisdictions by the Non-Cooperative Countries and Territories (NCCT) Initiative.” – stated the release by Business Korea. It is possible that besides money laundering terrorism financing could have been a great contributing factor to the decision. No new users will be added from the banned countries, while the existing user accounts will be terminated after 21st.
The complete list of banned countries includes North Korea, Iran, Iraq, Serbia, Ethiopia, Syria, Trinidad, Tobago, Tunisia, Vanuatu and Yemen. Besides blocking these countries from the exchange, Bithumb also will make user verification process tougher and more comprehensive. User verification is important to comply with KYC regulations. It is tough to achieve for many online-based companies as there is no face-to-face interaction with customers. They have to find innovative ways to establish user identity. Furthermore, burdensome user registration process can scare away certain customers and could potentially cost exchange its business. Nevertheless, regulatory risk is likewise high so many exchanges choose to have meticulous verification processes.