South Korean Watchdog Uncovers 14 Fake Bank Accounts Used by Crypto Exchanges - Blockchain.News

South Korean Watchdog Uncovers 14 Fake Bank Accounts Used by Crypto Exchanges

The South Korea financial regulator has uncovered 14 fake accounts used by crypto exchanges.

  • Jul 29, 2021 09:25
South Korean Watchdog Uncovers 14 Fake Bank Accounts Used by Crypto Exchanges

Amid the growing regulatory clampdown on trading platforms in South Korea, the Financial Services Commission has uncovered 14 fake accounts being used by crypto exchanges in the country.

Per a report from Hankyoreh, the discovery was born out of an investigation of virtual asset collection accounts featuring customer deposit and withdrawal accounts with more than 3,000 financial companies. 

The investigation revealed that 79 virtual asset operators or exchanges run 94 collection accounts, and 14 of them were fake accounts. The situation which aggravates the clampdown on the nation’s exchanges is bound to be more proactive actions, including the suspension of the fake accounts, with information shared with the police for potential prosecution, according to the FSC.

The regulators' discovery of these fake accounts has renewed calls to sound warnings to consumers to beware of as exchanges are bound to close down ahead of the September 24 deadline for reporting set for trading platforms.

“The risk is increasing, such as temporarily shutting down the business while operating temporarily until September 24, the expiry date of the reporting deadline for the exchange. It’s high, so you need to be careful.”

Exchange Turmoil Takes Different Shades

Feared of being the channel through which digital currencies are exchanged, trading platforms pose a crucial challenge for regulators worldwide. The need to protect consumers from the risks of trading or to invest in digital assets has pushed the world’s largest exchange, Binance, to reduce its margin leverage from 125x to 20x in response to various watchdog’s prompting.

In particular, Binance Markets Limited, a subsidiary of Binance in the United Kingdom, has been banned from conducting any regulated exchange activity in the country. Other exchanges worldwide are also adjusting to new rules regularly as watchdogs seek to protect users from the inherent risks involved in crypto. Based on this, the exchange looks to create a more regulatory compliant offshoot, Binance UK.

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