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By Lee Min-hyung
As Shinhan Bank starts to issue real-name bank accounts for corporate clients' cryptocurrency trading, more capital is expected to flow into the market in line with the incoming administration's deregulatory stance on the industry, officials said Monday.
Up until recently, banks affiliated with crypto exchanges did not issue bank accounts for companies over fears of possible money laundering and the years-long regulatory market circumstances here.
But Shinhan decided recently to issue real-name accounts for some of its corporate clients, so they can make crypto transactions via its affiliated exchange, Korbit. The lender said it has started doing so, as part of a pilot program, under which some members of the Korea Digital Asset Trust (KDAC) can receive the accounts after the lender finishes a review of them. Shinhan Bank invested in KDAC in January 2021 to tap into the digital asset custody market, with a long-term plan to attract more capital from corporate clients.
The latest decision by Shinhan is expected to bring a ripple effect across the crypto industry at a time when the incoming Yoon Suk-yeol administration is giving deregulatory signals for the market.
Cryptocurrency exchanges have for years had to walk on eggshells due to the government's tight regulatory guidelines. This limited the amount of capital they and their affiliated banks could attract from corporate investors.
Industry officials expected more exchanges to make a similar decision after Yoon's inauguration next month, as he is expected to pursue deregulatory policies in line with the global boom in the crypto industry.
"It is crucial for the crypto market to attract corporate clients for game-changing growth in the industry here," an official said. "If they expand investments into the crypto market, this will help enhance the overall image of crypto trading which many people here still consider speculative."
As of the end of 2021, the number of corporate clients using local crypto exchanges reached 4,426, according to data from the Financial Services Commission. The figure falls far short of the 15.25 million retail investors registered during the same period.
But exchanges have had to offer corporate clients only limited trading services, as they have not been allowed to purchase cryptocurrencies with cash via the local exchanges. But retail investors have been able to do so by receiving real-name bank accounts from the exchanges' affiliated lenders.
Another financial industry official said it will take more time until an ecosystem is established for more companies to actively invest in crypto trading here, due to the lack of regulatory guidelines.
"Shinhan's latest move is to verify whether opening accounts for corporate clients' crypto trading comes with any possible risks of money laundering, and this is simply a pilot program for the time being," the official said. "It depends on how much the incoming administration eases regulatory hurdles on the issue."
