Trading volume at one of the world’s largest cryptocurrency exchanges has plummeted by 40 percent in three days after it temporarily stopped opening new user accounts.
South Korea’s Bithumb exchange – which suffered a $31 million hack in June – said in a blog post on July 31 that it will suspend the opening of new customer accounts from Aug. 1 as it is undergoing a “service improvement process” regarding so-called virtual customer accounts.
While the exchange did not give further details as to the reason for the suspension, a report from Business Korea on Tuesday cited banking industry sources as saying that the exchange was forced to into the suspension because its banking partner, NH Nonghyup Bank, has yet to renew Bithumb’s contract following the hack.
Twenty-four-hour trading volume on Bithumb was around $350 million on Tuesday, according to archived CoinMarketCap data. Yet, over the past three days, volume has declined to around $200 million (as of press time on Friday), reflecting an over 40-percent drop.
The exchange has not responded to CoinDesk’s request for comment on the trading volume drop and the banking issue.
While new accounts are suspended for now, Bithumb said that customers who already have identity-linked virtual accounts – effectively, sub-accounts that link individual users back to the exchange’s bank account – can still use them for deposit and withdrawal services, the report adds.
Bithumb reportedly said it has a “consensus” with Nonghyup Bank on the renewal of the contract and is “planning to iron out our different views on some legal expressions and start issuing virtual accounts soon.”
Should a final agreement not be reached, Business Korea states that Bithumb can still collect service customer deposits and withdrawals through what’s called a “hive account,” though the option would be far less convenient for users.
Alongside the more negative news for the exchange, it also announced Thursday that deposits and withdrawals in 10 cryptocurrencies will be reinstated this coming Saturday, including bitcoin (BTC), ether (ETH) and XRP. The platform said the move comes after it had completed security checks and improvements after the June breach.
It further noted that, after observing a 10 percent disparity between prices on Bithumb and those on external exchanges, it will delay reinstating services for another batch of cryptocurrencies until prices stabilize.
South Korean regulators mandated the use of so-called real-name virtual accounts from the end of January over fears that the anonymous accounts permitted previously provided greater risk of money laundering.
Following recent hacks and other issues, the country is also moving to further regulate crypto exchanges, with a number of new bills being prepared by lawmakers across the political spectrum.
On July 26, an executive at the Financial Services Commission called on politicians to pass a bill regulating cryptocurrency exchanges “as soon as possible.”
Bithumb image via Shutterstock
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