Leading Korean Exchange Coinone Blocks Crypto Wallet Withdrawals

Key Takeaways

  • Coinone will block cryptocurrency withdrawals to unverified external wallets.
  • The move means that Coinone users will be unable to withdraw to wallets that do not require know-your-customer verification, such as MetaMask.
  • Coinone’s new customer verification is likely part of its efforts to comply with regulation from Korean authorities.

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The Korean crypto exchange Coinone is planning to implement new external wallet registration procedures that will block users from withdrawing funds to unverified external wallets.

Coinone Stops External Wallet Withdrawals

Crypto regulations on Korean exchanges are getting tighter.

Coinone, the third-largest crypto exchange in Korea, announced via a Wednesday notice on its website that it plans to implement new external wallet registration procedures for its customers. 

Commencing Jan. 24, 2022, Coinone users will no longer be able to withdraw cryptocurrencies to unverified external wallets. The change means that Coinone users cannot withdraw funds to wallets that do not require know-your-customer registration, such as MetaMask and Ledger. 

Ahead of the change, there will be a preliminary external wallet registration period from Dec. 30, 2021, to Jan. 23, 2022, where users can register their wallets for withdrawal approval. “Withdrawal to an unregistered wallet is restricted after the enforcement date, so please apply in advance during the preliminary registration period,” the exchange stated in its notice. 

On Coinone’s support page, the exchange explained the reason behind the new customer verification system, stating: 

“To ensure that virtual asset transactions or services provided by Coinone are not used for illegal activities such as money laundering, we check customers’ names, resident registration numbers, and other details.”

Over the summer, the Korean government has implemented several measures to crack down on illegal cryptocurrency activities. In July, South Korea’s financial regulator warned foreign cryptocurrency exchanges offering services to Koreans, mandating that they comply with know-your-customer standards for all cross-border transfers or face fines and prison time. Shortly after, Korean authorities also proposed revising the tax code to allow tax authorities to seize crypto assets held by tax dodgers in digital wallets. 

Coinone’s new customer verification standards have likely been implemented to ensure the exchange is compliant with current and futures regulatory standards in South Korea. Whether other Korean exchanges will implement similar restrictions on unverified external wallets remains to be seen. 

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies. 

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