About 8 percent of virtual bank accounts for cryptocurrency trading have been converted to real-name bank accounts, a week after the government ended anonymous trading of cryptocurrencies, industry sources said Tuesday.
The real-name trading system, which came into effect from Jan. 30, is part of the government’s latest measures to curb speculative investment into virtual coins amid growing fears that a cryptocurrency bubble may be set to burst.
There are about 1.74 million cryptocurrency accounts at three local banks — Industrial Bank of Korea, NH Bank and Shinhan Bank — according to the sources.
As of Sunday, 143,300 virtual ledgers for cryptocurrency trading, or 8.21 percent of the total accounts, had been converted to real-name bank deposits, the sources said.
Currently, people can buy or sell cryptocurrencies through their virtual accounts, but they must comply with the real-name trading system if they want to pour new money into cryptocurrencies or withdraw money from these accounts.
Market watchers said people have been reluctant to convert their virtual accounts to real-name bank accounts as the prices of bitcoin and other cryptocurrencies have plunged in recent weeks.
The price of bitcoin, which traded at nearly US$20,000 late last year, tanked more than 15 percent on Monday to fall below $7,000.
Cryptocurrencies like bitcoin and ethereum have rapidly gained popularity among South Korean investors hoping to make quick money.
Despite a boom in cryptocurrency transactions, the exchanges go largely unregulated in South Korea as they are not recognized as financial products, with the country having no rules for protecting virtual currency investors.