South Korea's commercial banks have decided to blacklist and regulate virtual bank accounts under corporate accounts that are used for virtual currency transactions.

The move is expected to deal a significant blow to new cryptocurrency exchanges since local banks stopped issuing virtual accounts for trading cryptocurrncies last year. 

An official from the financial authorities said on Wednesday that the recent inspection of such accounts found that it’s easy for them to be used in money laundering and difficult to identify the real owners.

The official said that financial regulators will require commercial banks to share these accounts information and reject related transactions as part of its anti-money laundering measures. 

Companies or universities which often conduct mass deposits and withdrawals are allowed to open numerous virtual accounts under their corporate accounts to identify customers and transactions. 

Most cryptocurrency exchanges have used this method but local banks stopped issuing new virtual accounts last year. However, some of the exchanges reportedly continued operating the virtual accounts.