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South Korean banks earned 36x Commission Income from Crypto Account services

Jan 20, 2018 Posted /  3829 Views

South Korean banks earned 36x Commission Income from Crypto Account services

South Korea and its related news are mostly revolving around the bans and the regulations. However, in an interesting twist of events, a data obtained from the country's Financial Supervisory Service (FSS) revealed that South Korean banks have been so far offering virtual account services to cryptocurrency exchanges and winning commissions through it. According to data, obtained by banks gained 36x more in commission income from crypto exchanges in 2017 than in 2016.

The Korean FSS has obtained the data from the six banks relating to their virtual account services to crypto exchanges- Woori Bank, KB Kookmin Bank, Shinhan Bank, Nonghyup Bank, Korea Development Bank, and Industrial Bank of Korea.

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The report by Yonhap disclosed on Thursday that the total commission income banks earned from these services last year were 2.221 billion won (~USD$2.1 million), which is 36 times more than the 61 million won earned the previous year. These figures are astonishing especially in the view that when there are talks that South Korea might officially ban cryptocurrency exchanges in the country.

The Bank for Upbit is leading the list

Banks secure money from cryptocurrency exchanges by charging them roughly 200 to 300 won per customer deposit, the news outlet elaborated, calculating that crypto traders pay higher commissions to the exchanges when withdrawing funds.

According to the FSS, the Industrial Bank of Korea received the maximum from virtual account services last year. The bank provides these services to Upbit, which has lately become the world’s biggest exchange by volume. Upbit is supported by Kakao Corp, the operator of South Korea’s most popular chat app, Kakao Talk. The bank “earned a total of 675 million won by setting a virtual account fee of 300 won per deposit,” the publication narrated.

The bank with the second highest commission income from crypto-related services is Nonghyup Bank which renders virtual account services to Bithumb and Coinone. The bank acquired 654 million won from these services last year.

Shinhan Bank provides virtual account services to a few crypto exchanges including Bithumb and Korbit, bringing it 621 million won last year. Kookmin Bank made 155 million won, the Korea Development Bank made 61 million won, and Woori Bank earned 59 million won from crypto exchanges last year.

At present, the South Korean government has mandated banks to stop publishing new virtual accounts until they have established the new a real-name identification system. Banks will also be compelled to check the intention of trading and the source of funds for each crypto account owner.

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Tags: South Korea Crypto Account Bithumb virtual accounts

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