Bithumb’s trading volume drops by 40% after it’s failure to renew contract with a bank. NH Nonghyup Bank rejected the bank’s proposal on the basis that the leading cryptocurrency platform in South Korea still has problems in protecting consumers and information and preventing money laundering. Consequently, Bithumb decided to stop issuing new virtual accounts after 1st August, 2018.
Twenty-four-hour trading volume on Bithumb was around $350 million on Tuesday, according to archived CoinMarketCap data. Yet, over the past three days, volume has declined to around $200 million (as of press time on Friday), reflecting an over 40-percent drop.
Although new virtual accounts are suspended for now, customers who already have identity-linked virtual accounts, sub-accounts that link individual users back to the exchange’s bank account, can still use them for deposit and withdrawal services.
Bithumb is hopeful for the contract with the bank to follow through, as a Bithumb representative commented on the development “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” but it will get difficult for the existing accounts if the service is entirely terminated.
South Korea dealt an iron blow to cryptocurrency when it’s financial watchdog set a deadline for the barring of anonymous cryptocurrency trading accounts within the country earlier this year.
South Korea’s National Assembly was also reportedly moving in for legislative efforts around cryptocurrencies earlier this month.
The distrust of the legislative body on cryptocurrency became obvious when an official notification set precedent to ant-money laundering guidelines.
“Specifically, for users to make virtual currency transactions more than 10 million won per day or more than 20 million won for 7 days when depositing and withdrawing funds, this is the type of financial transaction you suspect for money laundering.”, said the notification announced in January this year.
Bithumb is stuck in deep waters, fending off attacks first from being suspected of tax evasion and poor business practices by a number of agencies in the past yet getting cleared by the National Tax Service in early June and then being the target of a crypto heist of 35 billion won. Security measures that cost Bithumb almost $9 million dollars annually were compromised which resulted in a halt for all trading. Bithumb confirmed it will pay back victims using its own reserves, the market was in disarray and BTC value dipped by $200 in mere hours after the heist and now this.
If Bithumb succeeds in renewing its contract with a bank, as per the regulations, the problems barrier may be overtaken but conditions can turn stark for Bithumb and Bitcoin as well if the renewal gets rebutted.