Bithumb Renews Contract With NH Bank for a Year Right Before the Deadline

According to the virtual asset industry on the 20th, Bithumb, a virtual asset exchange, is about to renew a one-year contract right before the expiration of the real-name deposit and withdrawal account service partnership contract with Nonghyup (NH) Bank.

Bithumb said in a press release on the 17th, “The contract renewal with NH for the issuance of real-name accounts is in the final stage, and we will sign a formal contract before March 24, when the contract expires.”

It is uncommon to disclose such details before the contract is concluded. In this regard, a Bithumb official explained, “We disclosed the process of contract renewal with the consent of NH Bank to alleviate market concerns regarding our real-name account contract.”

NH Nonghyup Bank has provided real-name account service to Bithumb for the past five years. However, as the contract’s expiration date with Bithumb and NH Bank approached, speculation was raised that maintaining a real-name account could be difficult. In particular, it is known that Bithumb pushed for a change to an affiliated bank from NH Bank to Kakao Bank, raising concerns in the process that Bithumb may fail to secure real-name account service.

As Bithumb succeeded in renewing the contract right before the contract expired, all five cryptocurrency exchanges operating in the KRW market will maintain real-name bank account services. Korbit’s contract was originally due to expire at the end of April this year, but it re-contracted with Shinhan Bank early at the end of last year.

Currently, among the five exchanges operating in the KRW market, Upbit has entered a real-name account issuance contract with K Bank, Coinone with Kakao Bank, and Gopax with Jeonbuk Bank.

In order for virtual asset exchanges to support transactions between coins and legal currency KRW in Korea, they must obtain a real-name account from a bank in accordance with the Act on Reporting and Using Specified Financial Transaction Information (Special Financial Transactions Act).

Currently, out of 27 virtual asset exchange operators reported to the financial authorities, only 5 virtual asset exchange operators have succeeded in signing real-name account service contracts with commercial banks: Upbit, Bithumb, Coinone, Korbit, and Gopax. Gopax is the only exchange that has succeeded in signing a new real-name account service contract with a bank after the enforcement of the Special Financial Transactions Act.

In the midst of this, demand for transaction stability is also growing as virtual asset risks, such as FTX bankruptcy following the Luna-Terra crash, and the recent bankruptcy of Silvergate and Signature Bank in the US, are emerging. Commercial banks are also taking a conservative approach to the risk burden of trading virtual assets. Currently, banks are known to offer high-level contract conditions to exchanges, such as system security and internal control capabilities. Not only new entrants but also the burden of maintaining real-name accounts in the existing exchanges is growing.

In the case of Gopax, it is currently being provided with a real-name account from Jeonbuk Bank. However, as Binance, one of the largest virtual asset exchanges worldwide, is proceeding with the acquisition of Gopax, its capability to maintain a real-name account has become a center of attention. Jeonbuk Bank can review Gopax’s implementation of anti-money laundering policies for reasons such as changes in the board of directors and the largest shareholder.

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