Bithumb Crypto Exchange Faces Bank Freeze and Halts New Accounts

Starting August 1, 2018, Korean cryptocurrency exchange Bithumb will no longer issue new virtual accounts due to the failure to renew a banking contract.

Bithumb has suspended new bank-linked virtual accounts after failing to establish a contract with NH Nonghyup Bank, reports BusinessKorea.

Bithumb is the second largest South Korean digital asset exchange by 24-hour trading volume and holds 33% of the domestic market share, according to data by FinTechNews.

The temporary halt on new accounts will not impact or prevent current virtual account holders from withdrawing or depositing funds linked to their bank accounts.

To prevent money laundering and increase market transparency, the mandate requires real name verification for an individual's exchange and bank accounts before authorizing cryptocurrency trading.

Bithumb reportedly terminated its original contract with Shinhan Bank and opted to renew a separate contract with NH Nonghyup Bank but was recently denied.

In mid-June, Bithumb suffered a large-scale hack and lost 35 billion KRW from hot wallets stored on its exchange.

"We have a consensus with Nonghyup Bank on renewal of the contract. We are planning to iron out our different views on some legal expressions and start issuing virtual accounts soon."

Among the top-4 cryptocurrency exchanges in South Korea, Bithumb is the currently the only operator without a commercial banking partnership.

Coinone has renewed its contract with NH Nonghyup Bank, Upbit renewed its contract with the Industrial Bank of Korea, and Korbit completed its contract renewal with Shinhan Bank.Cover Photo by Joshua Earle on Unsplash.