Cryptocurrency

Cryptocurrency trading ban: South Korea sending out mixed signals

Bitcoin

South Korea has been at the focus of many cryptocurrency investors and traders with reports emerging at one point that the government was about to ban cryptocurrency trading while the very next moment reports emerge that the government isn’t looking to ban trading entirely.

These mixed signals have been one of the probable reasons behind the recent cryptocurrency upheaval when prices of all cryptocurrencies dropped by 50 per cent on an average and wiped off $400 billion from the market in a matter of hours.

“Opinions on cryptocurrency trading are sharply divided within the government,” Hong Nam-ki, minister of the office for government policy co-ordination, said according to reuters before adding he “vowed to make a decision on regulations during Thursday’s parliamentary session.”

There have been other reports that claim that South Korea’s chief of the Financial Services Commission is considering a complete ban on all cryptocurrency trading on one hand and a partial ban of those not following the laws on the other.

The latter looks more likely. South Korea’s Joongang Daily reports Kim Sang-Joo, chairman of the Fair Trade Commission (FTC), said according to a rough translation:

“The virtual money exchanges are being investigated on whether they are reporting to telecom dealers under the E-Commerce Act of the FTC. We are investigating whether the Exchange is suspected of violating the terms of the contract, such as restricting the withdrawal of counterparties or imposing excessive immunity.”

While apparently Kim said outright banning exchanges is “impossible” and beyond their legal authority, he suggested legal enforcement could be used to in effect potentially achieve the same aim.

However, he further says exchanges have engaged in “many illegal activities,” but he doesn’t mention which ones, nor is it clear whether any exchange has been cleared of any wrongdoings.

Currently, the FTC is investigating Bithumb, Korbit and 13 other exchanges based in South Korea, and in the process has apparently discovered violations, but the chairman seems to be in favor of regulations rather than outright banning.

But there may be a power struggle underway as some officials are interested in encouraging innovation in the country. For example, the Ministry of Science, Technology and Communication is interested in fostering core technologies of digital currencies.

Public opinion in South Korea is surprisingly somewhat divided with some polls suggesting 43% are in favor while 47% are against a ban. The latter, however, are more likely to have a strong view on the matter to the point where it may affect their voting decisions.

Some 200,000 South Koreans have signed a petition demanding any proposed ban does not go ahead with the popularity of their president slightly falling recently.

Unlike China, South Korea is a democracy. Their decision therefore may have consequences when it comes to election time. With the opposing party seemingly against.

About the author

Belinda Carey

Belinda Carey

A finance girl by education, Belinda has been drawn to cryptocurrencies ever since Bitcoin first emerged in the 2009. Nearly a decade later, Belinda is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies.

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