The effect this one Southeast Asian nation has upon crypto markets is quite astounding. South Korean exchanges dominate trade in the region, and constant government threats of clampdowns has caused waves of nausea among investors elsewhere on the planet.
Contrary to multiple fearmongering reports on mainstream news sites, including Reuters, Bloomberg, and CNBC, South Korea will not close crypto exchanges. In fact, according to the chairman of the South Korean Fair Trade Commission, Kim Sang-jo, closing exchanges is “impossible in reality.” It was reported earlier today that he said this in a CBS radio interview.
FUD No More
A constant stream of rumours and threats of closure emerging from the country and being picked up by western media outlets has no doubt contributed to a number of market dips and slides over the past couple of months. The recent drop can be accounted to a number of other factors, but South Korea remains a strong influence.
According to local press, the KFTC is investigating 13 exchanges for possible violation of an e-commerce law within the country. Some of the exchanges being investigated include some of the big ones, such as Bithumb, Coinone, and Korbit. More importantly, Kim Sang-jo stated:
There is no applicable legislation [to ban cryptocurrency exchanges]. Any violation of the electronic commerce laws is not enough in itself to legally force the closure of cryptocurrency exchanges.
When questioned about other government agencies having authority over crypto exchanges, he added:
Cryptocurrency has recently emerged and other laws do not have the exact legal provisions related to closing exchanges.
Not Enough Crypto
Aside from being one of the top trading nations in the region, the KFTC chairman went on to say the amount of money invested in crypto is not stable enough for it to be properly labelled as speculation. Until there are regulations, investors are responsible for their own risks. He said that other illegal activities were discovered during recent government investigations. However, they would prefer to encourage voluntary reforms, at least for the first half of the year.
According to state media Yonhap, the Financial Services Commission will only seek to close operations that have undertaken illegal activities. It also reported that Justice Minister Park Sang-ki said:
We have taken steps to calm the overheating within the framework of the current law.
So, in essence, closing South Korean crypto exchanges is an “unrealistic possibility” and any illegal activities in the cryptocurrency space should be addressed with appropriate regulations rather than an outright ban.
Good news out of South Korea finally. Will this instill more confidence in the markets? Add your views in the comments below.
Images courtesy of Bitcoinist archives and Pxhere.