Bithumb has disallowed new registrations for traders in South Korea since January of 2018, following the encouragement of the government to establish formal agreements between cryptocurrency trading platforms and the country’s regulated financial institutions.
Previously, NH Bank, better known as Nonghyup Bank, declined to provide virtual bank accounts to Bithumb citing various security and internal management system-related issues, in light of Bithumb’s recent $40 million security breach and the one-month period in July during which Bithumb suspended deposits and withdrawals.
This week, some mainstream publications like Chosun reported that the bank and Bithumb reached an agreement and today, NH Bank confirmed that it has secured a partnership with Bithumb.
What Bithumb Registration Resumption Means to Crypto Market
Beginning on September 1, new users will be able to create accounts on Bithumb to trade various major cryptocurrencies and tokens with the Korean won. Considering that Bithumb and other leading cryptocurrency exchanges have not been able to facilitate new users since January, local analysts predict that a new wave of capital will hit the Korean markets.
Speaking to Hankyung, a Bithumb representative said:
“Bithumb is now able to issue virtual bank accounts for new users after a partnership has been established with NH Bank. Bithumb will continue to comply with the bank’s guideline strictly while cooperating with the government to create a transparent and robust market for local investors.”
Last week, the South Korea Ministry of Science and IT investigated 21 digital asset exchanges including major cryptocurrency trading platforms like UPbit, Bithumb, Coinone, and Korbit. Investigators found that most of the exchanges had extremely poor security measures and opaque internal management systems.
Kim Jeong-sam, the information protection officer at KISA, said:
“There still exists many cryptocurrency exchanges with subpar security systems and as such, investors are cautioned in investing through unrecognized platforms. The government will continue to monitor and evaluate cryptocurrency exchanges to improve the standard of security employed by trading platforms.”
But, the investigators told local media outlets that UPbit, Bithumb, Korbit, Coinnest, Coinlink, Coinone, Coinplug and Huobi have decent security systems in place, reassuring local investors that with some improvements and alterations, crypto exchanges in South Korea are safe to rely on.
Market Recovery Expected
Throughout the past eight months, as the price of Bitcoin fell by more than 60 percent and the rest of the market declined by more than 80 percent, many investors in South Korea that have speculated on the market at its all-time high were hit with significant losses in their holdings.
Some, as NY Times reported, received tens of thousands of dollars in loans to invest in Bitcoin, as a short-term play to profit off of the market.
The vast majority of investors that were affected by the correction of the market in 2018 will likely not come back to the market in the years to come. But, newly opened registrations will attract new investors, possibly lured in by the lower price range of major cryptocurrencies, which may contribute to the recovery of the global cryptocurrency market.