A number of South Korean government agencies sparked a mass selloff in cryptocurrencies on Thursday following several developments. Despite certain actions taken or planned, it is important to clarify that there is no outright South Korea cryptocurrency ban on exchange of bitcoin, or any other coin — yet.
Justice Minister Park Sang-ki announced Seoul's intent to pass legislation banning crypto trading entirely, according to a report by Reuters. Accompanying raids by the country's tax authorities against two popular Korean exchanges, Bithumb and Coinone, sent rates tumbling.
“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” Park told reporters. Several publicly traded companies with interest in the industry, including Bithumb shareholders, Omnitel and Vidente, each saw stocks drop about 30%.
Despite those developments, a ban is not imminent and would take time to work through the country's parliament. Demand for bitcoin and ethereum is also high in the country, presenting somewhat of a political challenge to pass such a sweeping embargo. Over 100,000 Koreans signed a petition on the presidential Blue House's website, knocking down the site.
Reuters notes a bill might take months to pass, or even years. It's also unclear how many members of parliament are on board for a ban right now, or what a compromise bill might look like.
Behind only the US dollar, South Korea's won is currently the second highest fiat currency traded against Ethereum, accounting for 10% of all trades. The won constitutes 5% of trades against bitcoin.
Regardless, Koreans should expect changes in the near future. In December, there was an effort to prohibit new accounts on the exchanges. If that happened, regulators could technically order a full halt to the exchanges because of the lack of access for new users.
The highest trading premiums in the world — northward of about 30% — have bitcoin trading at over $18,000, according to Bithumb. Meanwhile, Coinbase is tracking the price at $13,850, as of this writing. That disparity is evident in other currencies also, including ripple (XRP). A lack of regulation actually worries exchanges outside the country. The South Korea Communications Commission fined Bithumb 60 million won in December for leaking customer data.
South Korea's "extreme divergence in prices from the rest of the world" prompted some exchange tracking websites to exclude the country from its rate calculations earlier this week. The lack of warning on the policy change generated confusion, helping to send a surging XRP plummeting from a high of $3.84 down to under $1.64 over the past few days.
Justice Minister Park Sang-ki announced Seoul's intent to pass legislation banning crypto trading entirely, according to a report by Reuters. Accompanying raids by the country's tax authorities against two popular Korean exchanges, Bithumb and Coinone, sent rates tumbling.
“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” Park told reporters. Several publicly traded companies with interest in the industry, including Bithumb shareholders, Omnitel and Vidente, each saw stocks drop about 30%.
Despite those developments, a ban is not imminent and would take time to work through the country's parliament. Demand for bitcoin and ethereum is also high in the country, presenting somewhat of a political challenge to pass such a sweeping embargo. Over 100,000 Koreans signed a petition on the presidential Blue House's website, knocking down the site.
Reuters notes a bill might take months to pass, or even years. It's also unclear how many members of parliament are on board for a ban right now, or what a compromise bill might look like.
Extreme divergence in prices from the rest of the world
Behind only the US dollar, South Korea's won is currently the second highest fiat currency traded against Ethereum, accounting for 10% of all trades. The won constitutes 5% of trades against bitcoin.
Regardless, Koreans should expect changes in the near future. In December, there was an effort to prohibit new accounts on the exchanges. If that happened, regulators could technically order a full halt to the exchanges because of the lack of access for new users.
The highest trading premiums in the world — northward of about 30% — have bitcoin trading at over $18,000, according to Bithumb. Meanwhile, Coinbase is tracking the price at $13,850, as of this writing. That disparity is evident in other currencies also, including ripple (XRP). A lack of regulation actually worries exchanges outside the country. The South Korea Communications Commission fined Bithumb 60 million won in December for leaking customer data.
South Korea's "extreme divergence in prices from the rest of the world" prompted some exchange tracking websites to exclude the country from its rate calculations earlier this week. The lack of warning on the policy change generated confusion, helping to send a surging XRP plummeting from a high of $3.84 down to under $1.64 over the past few days.