South Korea's real-name cryptocurrency trading system has been operational for over a month, yet adoption remains limited. Most accounts have not transitioned to the new framework, banks have been slow to support account migration, and regulatory enforcement appears relaxed.
Current Adoption Rates Are Disappointing
According to recent reports, the conversion rate from virtual to real-name accounts stands at just 19% one month after the government-mandated system was introduced. A significant volume of cryptocurrency trading continues via non-real-name virtual accounts.
Among major exchanges, Bithumb shows the lowest conversion rate at 15%, while Coinone leads with 26%. Furthermore, no banking institutions have yet enabled real-name transitions for smaller cryptocurrency exchanges.
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Out of 169,500 accounts, only 19% have completed the transition to the real-name system. This means just one-fifth of investors are using verified identities for crypto transactions.
Major banks show varied progress. Shinhan Bank, which initially issued 125,000 virtual accounts, has converted 28% to real-name. The Industrial Bank of Korea (IBK) reported 22% conversion—34,000 out of 127,791 accounts.
Nonghyup Bank, hosting the largest number of virtual accounts, has converted 90,000 of Bithumb’s 139,000 accounts. It also enabled 26,000 conversions for Coinone’s 100,000 accounts. As of early March, the bank had established 174,000 real-name accounts for Bithumb and Coinone combined.
Small and Medium Exchanges Are Left Behind
The real-name system was launched on January 30 to eliminate anonymous crypto trading. While six Korean banks have implemented the system, only three currently offer services to crypto exchanges: Shinhan Bank, Nonghyup Bank, and IBK. These services are limited to the four largest exchanges: Upbit, Bithumb, Coinone, and Korbit.
Approximately 25 smaller exchanges still operate without real-name verification. The Financial Supervisory Service (FSS) has acknowledged the issue and is urging banks to expand support.
Frequently Asked Questions
What is South Korea’s real-name cryptocurrency system?
It is a regulatory measure that requires all cryptocurrency trading to be conducted under verified real-name bank accounts, replacing previously used virtual accounts. The goal is to increase transparency and reduce fraud.
Which banks support the real-name system?
Shinhan Bank, Nonghyup Bank, and the Industrial Bank of Korea currently provide real-name account services, but only for the four major crypto exchanges.
Why is the conversion rate still low?
Slow bank support, technical delays, and lack of strict enforcement have contributed to low migration rates. Many users and smaller exchanges have not yet been required or enabled to switch.
Are small exchanges operating illegally?
Not necessarily. While they are not yet compliant with the real-name system, the FSS is pushing for a broader rollout rather than penalizing operators immediately.
What happens if someone doesn’t switch?
Users on non-compliant platforms may eventually face restrictions in depositing or withdrawing Korean won. However, no strict penalties have been enforced so far.
Is the real-name system effective against fraud?
In theory, yes. By linking bank and exchange accounts under verified identities, it becomes harder to use cryptocurrencies for illegal activities. However, effectiveness depends on widespread adoption.