There have been calls to relax the so-called 'one transaction one bank' regulation, which requires each virtual asset (cryptocurrency) exchange to partner with only one bank for real-name verified deposit and withdrawal accounts (real-name accounts).
On the 8th, the Korea Institute of Finance released a report stating that the utility of the 'one transaction one bank' regulation has diminished and that regulatory relaxation is necessary. Currently, virtual asset exchanges are in the process of partnering only with one bank for real-name verified deposit and withdrawal accounts (real-name accounts).
Upbit has partnered with Kbank, Bithumb with KB Kookmin Bank, and Coinone with KakaoBank. Therefore, investors wishing to use Upbit must open an account at Kbank, rather than their usual primary bank, to link their accounts with Upbit.
This is due to the financial authorities mandating real-name account linkage for virtual asset exchanges in December 2017 to prevent money laundering, among other purposes. At that time, the requirement for exchanges to partner with only one bank became a form of 'shadow regulation.' Exchanges that have changed their partner banks, such as Bithumb and Coinone, must terminate their contracts with NH Nonghyup Bank and re-establish partnerships with KB Kookmin Bank and KakaoBank.
The Korea Institute of Finance noted that this 'one transaction one bank' shadow regulation was useful in the past, but is no longer effective today, as relevant legal frameworks have been established, including the amendment to the Specific Financial Information Act in 2021 and the Virtual Asset Users Protection Act in 2024.
Senior Research Fellow Seo Byeong-ho analyzed that the one transaction one bank system is useful in terms of simplifying transaction monitoring and suspicious transaction reporting, streamlining internal control systems, simplifying IT system construction, and clarifying responsibility in case of incidents.
Seo noted, 'In the past, when our country lacked protective measures related to virtual assets, this system contributed to enhancing investor trust.' He added, 'When a bank partners with only one virtual asset exchange, it makes detecting fragmented remittances easier, thereby simplifying money laundering prevention tasks such as suspicious transaction reporting.'
However, currently, the utility of this system has diminished. The drawbacks include a lack of legitimacy as shadow regulation, limitations on user choice, decreased incentives for innovation among exchanges and banks, dependency of small and medium-sized exchanges on banks, and the concentration of risks of large exchanges in a single bank.
Most importantly, safety measures to prevent money laundering at virtual asset exchanges are now in place. Seo stated, 'With the enactment of the amended Specific Financial Information Act in 2021, the Virtual Asset Users Protection Act in 2024, and the expected enactment of the Basic Virtual Asset Act in 2025, the utility of the one bank one transaction regulation has diminished, so I believe it is time to relax this regulation.'
He further added, 'If regulations are relaxed to allow transactions through more banks, the convenience for virtual asset users will greatly improve, and we can expect a range of benefits such as increased incentives for exchange innovation leading to improvements in product lineups and interfaces, diversification of services, and enhanced customer support.'