SEOUL: South Korean financial authorities on Monday said they are inspecting six local banks that offer virtual currency accounts to institutions, amid concerns the increasing use of such assets could lead to a surge in crime.
The joint inspection by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) will check if banks are adhering to anti-money laundering rules and using real names for accounts, FSC Chairman Choi Jong-ku told a press conference.
The six banks named by the regulator have all provided virtual currency accounts to clients that handle cryptocurrencies, according to the FSC. The banks are NH Bank, Industrial Bank of Korea, Shinhan Bank, Kookmin Bank, Woori Bank and Korea Development Bank.
Choi said the inspections are intended to provide guidance to banks and are not the result of any suspected wrongdoing.
“Virtual currency is currently unable to function as a means of payment and it is being used for illegal purposes like money laundering, scams and fraudulent investor operations,” said Choi.
“The side effects have been severe, leading to hacking problems at the institutions that handle cryptocurrency and an unreasonable spike in speculation.”
A Woori Bank spokesperson told Reuters the bank was filling out a checklist for the inspection. The spokesperson said Woori had stopped providing virtual account services last month as the costs of using a real-name transaction system were too prohibitive.
NH Bank and Shinhan Bank representatives declined to comment, while the other three banks could not immediately be reached for comment.
Choi said authorities are also looking at ways to reduce risks associated with cryptocurrency trading in the country, which could include shutting down institutions that use such currencies.
Last month, the government said it would impose additional measures to regulate speculation in cryptocurrency trading within the country, including a ban on anonymous cryptocurrency accounts and new legislation to allows regulators to close virtual coin exchanges if needed.
Bitcoin and other virtual coins have been extremely popular in South Korea, drawing wide investments from housewives and students. Government officials have expressed concern over frenzied speculation, with South Korea’s central bank chief warning of “irrational exuberance” in trading of virtual currency last month.
A South Korean cryptocurrency exchange, Youbit, shut down and filed for bankruptcy in December after it was hacked twice last year, highlighting security and regulatory concerns.
South Korea’s virtual currency exchanges have been more vulnerable to hackers as bitcoin trades at higher rates on local exchanges than they do elsewhere. As of 0710 GMT, bitcoin’s global price average was trading at $16,294 while in South Korean markets, it stood at 25 million won, or $23,467.35, according to Coinhills.com.
South Korea’s bitcoin prices are higher because of the extreme popularity of the virtual currency in the country, with buyers greatly outnumbering those willing to sell, said Park Nok-sun, a cryptocurrency analyst at NH Investment & Securities.
The fact that some of the most active virtual currency exchanges in the world are in South Korea also makes the country an attractive target for hackers, he added.
Choi warned on Monday authorities would crack down on virtual currency crime and dole out heavy punishments on those who partake in market price manipulation, pyramid schemes and money laundering.
“No one knows what is going on at these places that handle cryptocurrency because there is no direct regulation system in place regarding these institutions,” Choi said.
South Korea inspects 6 banks over virtual currency services to clients
South Korea inspects 6 banks over virtual currency services to clients
Foreign buying of Saudi stocks hits $1.33bn ahead of Feb rule change
RIYADH: Foreign investors made net purchases of around SR5 billion ($1.33 billion) in Saudi stocks during January, coinciding with the announcement that the market would be opened to all categories of non-resident foreign investors — individuals and institutions from around the world — directly and without conditions.
According to the Financial Analysis Unit at Al-Eqtisadiah, January’s foreign buying represents the largest monthly purchases since 2022, excluding June 2024, when Aramco held a secondary offering, and September 2025, following a Bloomberg report that the Saudi Capital Market Authority, or CMA, would allow foreigners to hold majority stakes in listed companies.
Since the market-opening announcement on Jan. 6, Saudi stocks rose by about 10.6 percent by the end of the month. These results were accompanied by a rally in the banking sector, which is expected to benefit most from the lifting of ownership restrictions and strong fourth-quarter results.
Rising oil prices also supported increases in Aramco, the largest stock by weight on the Tadawul All Share Index, alongside gains in Maaden following new discoveries and higher gold prices, as well as SABIC, after news of asset sales in Europe and the Americas that had previously caused losses for the company.
The new amendments removed the regulatory framework for swap agreements, which had been used to allow non-resident foreign investors to gain only the economic benefits of listed securities and to enable direct investment in stocks listed on the main market.
Foreign purchases in January reflected buying by foreign investors who were already in the market ahead of the decision’s implementation in early February.
Foreign buying last month was likely driven by active funds. With the easing of restrictions, the market’s weight in emerging-market indices is expected to rise later, which could in turn attract additional inflows from passive funds that follow market and company weights in these indices.
The largest impact is expected on TASI’s weight in emerging-market indices, following the proposed increase in foreign ownership caps for listed companies, pending CMA approval.
Foreign investors accounted for around 41.7 percent of total market purchases in January, compared with just 5.6 percent in 2018, before joining emerging-market indices, highlighting their growing influence in the market.
With the market rally and foreign buying in January, the value of foreign investors’ holdings rose to SR465.5 billion, representing 4.87 percent of the total market and 12.67 percent of free-floating shares. Their influence also increased in terms of free-floating shares, rising from 11.01 percent at the end of 2024 to 12.4 percent by year-end.
The latest regulatory decision is expected to improve market liquidity over the long term, make stock valuations fairer, expand the investor base, deepen the market, and enhance overall efficiency.
Foreign investment rules in Saudi stocks
Foreign investments in Saudi stocks are currently subject to several restrictions, including that non-resident foreign investors, excluding strategic foreign investors, may not own 10 percent or more of the shares of any listed company or its convertible debt instruments.
Foreign investors — all categories, resident or non-resident, except strategic foreign investors — may not collectively hold more than 49 percent of any listed company’s shares or convertible debt.
These limits are in addition to any restrictions set out in companies’ bylaws, other statutory regulations, or instructions issued by the relevant authorities that apply to listed companies.
