Bithumb bans employees from trading assets on the platform
A totally unexpected and very confusing decision has been made by Bithumb. The South Korean cryptocurrency exchange bans its employees from trading digital assets on the platform. While the decision seems strange, the company calls it justified.
New law and £64,000 fine
On Friday, 2nd July, Bithumb made a resounding announcement. From now on, its employees won’t be eligible to benefit from its services. At least, they won’t be able to trade assets on the platform.
According to the company, the decision wasn’t pulled from thin air. It aims to improve transparency for transactions involving cryptocurrencies. Still, experts believe that this decision was, in fact, an attempt to comply with the upcoming law, which they hypothesise to be adopted in South Korea in the near future. Reportedly, it would prohibit all the local crypto exchanges from allowing their employees to trade digital currencies on their platforms.
Those who support the hypothesis even name the date for the law to come into force — 25th September. The law would include a strong penalty, any employee failing to comply with the provisions would be fined up to 100 million KRW ($88,000 or £64,000) by the Financial Services Commission of Korea (FSC).
In its official announcement, Bithumb promises the decision will come into effect by the end of July. “From this month on, we will strictly manage whether or not employees comply with the regulations through continuous monitoring, self-audits, and internal reporting system operations,” the company explains.
Restrictions might force exchanges to close
Bithumb has already placed some other restrictions on its employees in the past. For example, they aren’t allowed to trade assets during their working hours. No employee may buy any digital asset within 72 hours of its listing on the exchange. Finally, Bithumb requires employees not to use any company information for their personal trading benefits.
For now, the new law expected to come into force in September is not announced officially yet. Although, other exchanges like Korbit or Upbit will probably follow in Bithumb’s footsteps.
The law will also reportedly require South Korean crypto exchanges to partner with local banks to open real name virtual bank accounts for customers by 24th September. Many small exchanges may be forced to close due to the new restrictions.
South Korea is going to slightly tighten up the rules for financial transactions involving cryptocurrencies. A new law may come into effect on 25th September, banning crypto exchanges’ employees from trading assets on the platforms they work for. Bithumb has already shown its obedience in the face of such provisions.