A man walks past a board showing exchange rates of various crypto-currencies in Seoul. Photo: Reuters/Kim Hong-Ji

The South Korean government is banning privacy coins as part of its anti-money-laundering drive.

Coins that add an extra layer of anonymity to transactions, such as Monero, Zcash and Dash, will not be sold at the country’s exchanges after March 21, 2021, CPO Magazine reports

The Financial Services Commission (FSC) said the frequent use of privacy coins (which it calls “dark coins”) for ransomware attacks and money laundering is the chief reason for the ban.

The new law augments the existing Special Payments Act, a comprehensive crypto regulation act that was passed in March. 

“Most mainstream crypto coins, such as bitcoin, are not completely anonymous: at the very least they make public the wallet addresses involved in the transaction as well as the amount. Law enforcement can track these transactions back to crypto exchanges, where the wallet holders can potentially be identified either by the email address they used to register the exchange account or by using personal identification to open it,” explains CPO.

“The privacy coins add a third party process that hides these transaction records, effectively making the parties involved totally anonymous and also making it extremely difficult for law enforcement to track them down.”

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.