South Korea Clarifies: Crypto Exchange Ban Isn’t For Sure

Though the ban isn't finalized, there's still a possibility that it could be in the future.

The proposed South Korean ban on trading cryptocurrencies through exchanges is not finalized, according to the South Korean Presidential Office.

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News of the proposed ban spread like wildfire through the internet on Thursday following comments made by South Korean Justice Minister Park Sang-ki.

A spokesperson for the Office said: “Justice Minister Park’s comments related to the shutdown of cryptocurrency exchanges is one of the measures prepared by the Ministry of Justice, but it’s not a measure that has been finalized.”

South Korean Justice Minister on Wednesday: “[A Shutdown] Would Be One of the Goals We Are Aiming For”

The news of the proposed ban emerged on Wednesday, when several major news sources reported that the South Korean Justice Department was drafting a bill that would outlaw the trading of cryptocurrency through exchanges.  

“The ministry is preparing legislation that basically bans any transactions based on a virtual currency through the trading floor,” said Justice Minister Park Sang-ki during a press briefing, according to Korean news source Yonhap News. “We have grave concerns about [the craze over] virtual currency and [a shutdown] would be one of the goals we are aiming for.”

At the time, the announcement seemed to be the logical next step in what was turning into a series of tightening regulations on cryptocurrency in South Korea.  Near the end of 2017, the country enacted a ban on ICOs; shortly after that, the decision to ban anonymous cryptocurrency trading accounts was made.

The bans stem from the South Korean government’s concerns that cryptocurrency is involved in crime, as well as the fact that the South Korean market seems to be particularly volatile. “[The cryptocurrency market] has started to resemble gambling and speculation,” Park Sang-Ki said at the same press briefing. “The fact that media have used the phrase ‘Kimchi premium’ reflects foreigners’ assessment that the Korean market is abnormal.”

The South Korean exchange ‘Youbit’ filed for bankruptcy in December following a hack that left the exchange without $35 million of Bitcoin.

Just a Rumour?

The announcement of the proposed ban caused the price of Bitcoin to plummet from around $14,500 to as low as nearly $13,100. Some in the crypto community called the announcement ‘FUD’; nothing more than a rumour that was meant to spread fear, uncertainty, and doubt.

However, the fact that the ban is not a certainty doesn’t mean that it couldn’t become one in the very near future.  The South Korean government is intent on finding a way to protect its citizens from volatility, or at least to tax gains made through cryptocurrency.

Said Park Sang-ki: “Virtual currency is not based on the exchange of something with a certain value. It’d be devastating if the bubble bursts after all the money that should’ve been invested vanishes as virtual currency.”

 

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