Anti-Money Laundering: Bithumb Blacklists Users from Iran and North Korea

Following a nationwide crackdown on crypto-related crime in South Korea, Bithumb was caught in the eye of a legal storm in 2020.

Now the leading exchange in South Korea is taking a step to put itself in the right light with regulators in its region.

Bithumb Looks To Put Itself Right Before Regulators

Bithumb is reportedly taking its anti-money laundering measures seriously. According to the local outlet Korea Herald, the foremost crypto exchange has placed restrictions on crypto trading accounts owned by users from countries where anti-money laundering laws are absent.

The list has about 21 countries on its watchlist. Bithumb says this decision was necessary as the affected nations have failed to adopt anti-money laundering (AML) measures recommended by the Financial Action Task Force (a global body that sets standards to prevent anti-money laundering and terrorist financing).

Affected nations will see their user accounts frozen on the Bithumb trading platform. They would also be stopped from opening new accounts with the company.

Of the 21 nations, Iran and North Korea are on the exchange’s main blacklist while the remaining 19 occupy a more temperate gray list. Bithumb says the blacklisted countries are major hubs for terrorist activities and money laundering while the gray list is for those countries considered safe havens for criminal activities.    

The gray list contains Yemen, Myanmar, Barbados, Iceland, Syria, Pakistan, Botswana, and 12 others.

Bithumb has experienced a lot of ups and downs in 2020, but it has grown on its compliance level. After the Seoul Police paid an unplanned visit to its headquarters on September 2. 2020 to conduct a search and seize operation, the crypto platform has taken regulatory compliance more seriously. 

Bithumb also recently partnered with Octa Solutions to develop anti-money laundering solutions tailored for virtual assets. In addition, the exchange joined forces with blockchain analytics firm Chainalysis to identify and stop illicit transactions on its platform.

The company will also introduce a “know your customer” (KYC) protocol to beef up its AML practices.

Bithumb’s active daily users rose to 1.1 million with 5 -7 billion won ($4.4 – 6.2 million) digital assets traded daily in Q1 2021.

Chairman Jeong-hoon Looking To Cash Out?

Rumors have surfaced online that prominent financial houses want to acquire Bithumb following its remarkable turnaround. The company with 1.1 million daily users is drawing attention from JP Morgan and the world’s largest derivatives exchange, CME Group.

Chairman Lee Jeong-hoon is holding out even though he was reportedly looking to sell the company to local gaming firms Netmarble, Nexon or NCSoft in 2018. He also sought a deal with Chinese crypto trading firm Huobi in 2019 but the deal did not materialize.

But with the company pulling huge transaction volume, Jeong-hoon may want to hold out until the platform’s trading volume rivals Upbit’s 2 trillion won, according to a market insider.