South Korean cryptocurrency exchange Coinone is likely to extend its real-name account partnership with KakaoBank for an additional year, as discussions to renew the won deposit and withdrawal account agreement near completion, according to a report from Edaily on Tuesday.
Background of the Partnership
KakaoBank has reportedly been reviewing a one-year extension of the partnership, which is set to expire in mid-August. The review process included an on-site inspection of Coinone’s operations in May. Coinone has maintained its real-name account partnership with KakaoBank since November 2022, when it switched from NH NongHyup Bank.
Under South Korean financial regulations, cryptocurrency exchanges must partner with a licensed bank to provide real-name account services for won deposits and withdrawals. This requirement is part of the country’s efforts to enhance transparency and prevent money laundering in the digital asset market.
Implications for Coinone and Its Users
The extension of this partnership is critical for Coinone’s continued operations in South Korea. Without a real-name account service, the exchange would be unable to facilitate fiat currency transactions, significantly impacting its user base and trading volume.
For users, the renewal ensures uninterrupted access to deposit and withdrawal services, maintaining confidence in the platform’s regulatory compliance. It also signals stability for Coinone amid a competitive market where regulatory adherence is paramount.
Regulatory Context and Market Impact
South Korea has been proactive in regulating the cryptocurrency industry, with the Act on Reporting and Use of Specific Financial Information mandating that exchanges partner with banks to offer real-name accounts. This partnership model has become a standard for compliance, and any disruption could lead to operational setbacks.
The likely renewal comes at a time when the global cryptocurrency market is showing signs of recovery, and South Korea remains a key market for digital asset trading. Coinone’s ability to maintain its banking relationship is essential for its competitive position against other major exchanges like Upbit and Bithumb.
Conclusion
The expected one-year extension of the Coinone-KakaoBank partnership underscores the importance of banking collaborations in the South Korean crypto ecosystem. It provides operational stability for Coinone and continued convenience for its users, while reinforcing the regulatory framework that governs the industry.
FAQs
Q1: Why is the real-name account partnership important for Coinone?
The partnership is required by South Korean law for cryptocurrency exchanges to offer won deposit and withdrawal services. Without it, Coinone would not be able to operate its fiat currency transactions, which are essential for most users.
Q2: When does the current partnership expire?
The current agreement between Coinone and KakaoBank is set to expire in mid-August. The reported extension would add another year to the partnership.
Q3: What happens if the partnership is not renewed?
If the partnership were not renewed, Coinone would need to find an alternative bank to provide real-name account services, or it would face suspension of its fiat trading services, potentially leading to a significant loss of users and market share.
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