Crypto exchange Bithumb bans employees from trading on its platform

Quick Take

  • South Korean crypto exchange Bithumb has banned its staff from trading on the platform.
  • The move comes ahead of a legal requirement in the country. 

South Korean cryptocurrency exchange Bithumb has banned its employees from trading on its own platform.

Announcing the news on Friday, Bithumb said the move is to enhance transparency over crypto transactions, but an upcoming law in Korea mandates local crypto exchanges must prohibit employees from trading on their own platforms.

The law becomes effective September 25. If crypto exchange employees don't comply by the date, they could face a fine of up to 100 million won (around $88,000) from the Korea Financial Services Commission (FSC) if they get caught trading on the platforms they work for.

Bithumb said it will completely ban Bithumb employees from trading on its platform by the end of this month. To that end, it has received "a written oath" from its staff that they will withdraw all funds by that time.

"From this month on, we will strictly manage whether or not employees comply with the regulations through continuous monitoring, self-audit, and internal reporting system operation," said Bithumb.

Bithumb currently already has some other restrictions imposed on its employees, it said. These include prohibiting them from trading during work hours and from buying new cryptocurrencies within 72 hours of their listing on the exchange. Bithumb also requires all employees not to use company information for personal trading benefits.

Given the law is imminent, other Korean crypto exchanges, such as Upbit and Korbit, could follow Bithumb's move. The law also requires local crypto exchanges to partner with local banks to open real-name bank accounts for customers by September 24. While bigger exchanges could meet the requirements, as many as 50 smaller exchanges in Korea could shut down given the requirements.

Earlier this year, Binance Korea and OKEx Korea shut down, ahead of the law that went into force in March that no longer allows Korean crypto exchanges to share their order books with other exchanges.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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May 5, 2022, 3:17PM UTC