A new twist has appeared in this never-ending saga in South Korea. One of the biggest banks in South Korea is planning to enforce stricter regulations on any accounts linked to cryptocurrency exchanges. Earlier this week, local news medium BEI News reported that Shinhan Bank will be imposing some “special measures” to ensure that all transactions involving these exchange-linked accounts will be properly monitored.
Per the report, these special measures include getting additional staff to help monitor the transactions of all its user accounts. It will also work continuously on developing systems that deal with monitoring transactions and identifying possible fraudulent transfers while hinting at the potential of developing an artificial intelligence system to spot any fishy activity.
The news agency quoted a Shinhan Bank spokesperson, who said, “We have set up a comprehensive plan for the elimination of telecommunication and financial fraud… We will continue to implement preventive measures so that customers will not be harmed in the future.”
However, it is also worth noting that this doesn’t necessarily mean that cryptocurrencies are being outlawed or exchanges are being stymied in the country’s banking system while traditional stock trading platforms continue to operate unchecked. It simply means that the transactions of these asset custodians would be scrutinized more thoroughly to help guard against any fraud or money laundering.
The report also suggested that the bank will be looking to disrupt the notion that it is providing aid to financial criminals, as fraud cases involving exchanges and their crypto asset custodians continue to increase. Back in March, Bithumb, one of the most popular cryptocurrency exchanges in the world, was hit in a hack that saw about $19 million in XRP and EOS stolen.
In a further explanation, the exchange pointed out that they detected “abnormal withdrawals” through their monitoring system the previous night. A translated note of the explanation revealed that the incident was described as an “accident involving insiders.”
The exchange’s EOS hot wallet reportedly began to send the EOS to the attacker’s wallet address until the company moved all remaining funds into its cold storage wallet.
In a separate blog post, Bithumb took the blame, claiming that it had focused only on attacks from the outside and didn’t bother to verify its staff.
While it is unclear whether the bank’s measures to “help protect” exchanges against hacks will be appreciated by the latter, the objective of customer security should still be achieved nonetheless.