South Korean FUD has greatly impacted cryptocurrency markets during the past 2 months of this winter season. Constant rumors and misinformation on the status of South Korean regulation banning crypto trading has created huge drops to prices as Korea has been one of the main players in the crypto market. The threat of a crypto crackdown had a larger than expected backlash and thousands of Korean crypto investors demanded the resignation of the justice and finance ministers.
While regulations surrounding crypto exchanges are still being worked on today, the Korean government, police, and tax agencies have been putting the heat on major Korean exchanges (Bithumb, Coinone, Korbit) and raided their offices earlier in the month to retrieve KYC and tax documents.
These recent actions of South Korea’s lawmen have definitely created FUD as Korea leaving the crypto market will be a decrease in billions in total market cap.
In order to calm the Korean investing masses, the Korean Fair Trade Commision (KFTC) has released a statement,
“The e-commerce law does not have the right to close virtual currency exchanges,” adding that “it is impossible in reality. We do not have the authority to close virtual currency exchanges…It is a clear reality that there is no proper legal provision related to it.”
When asked if other ministries could ban or close cryptocurrency exchanges, Kim emphasized, “cryptocurrency has recently emerged and other laws do not have the exact legal provisions related to closing exchanges.”
The KFTC has also stated that they do not agree with the Justice Minister’s stance on cryptocurrency being gambling and categorize crypto as safe, volatile yes, but legit investments.
South Korea has not banned crypto trading and is looking at it’s current state as legal as there has yet to be a law made against it. Regulators have upped the Know-Your-Customer (KYC) process and are cracking down on exchanges that are not complying. The KFTC has said they will call for voluntary reforms amongst exchanges during the first half of the year, but stricter direct reforms will be placed if compliance is not met.
Cryptocurrency is still in it’s infant stages and government’s are scrambling to figure out the best way to coincide with the digital currency. The situation in Korea surrounding crypto is causing huge splashes in the markets but I believe it will work out to be beneficial and set a precedent for future crypto regulations. Potential bans and tighter regulations will be more common for all nations in the future. Fortunately, the South Korean people are resilient and will fight back against such injustices made by their government. They are the prime example of effective, organized protest as they made history 2 years ago calling for the impeachment of their president.If anyone has to show us how to fight these bans, South Korea is the country to do it.