South Korean cryptocurrency holders have described a potential exchange ban as “not a big problem” as Seoul launches an investigation into insider trading.
Exchange Ban Has ‘Capital Outflow’ Risks
Speaking to mainstream western media about the current turbulent regulatory climate in the country, one holder said opening an account on a foreign exchange or using connections abroad as proxies were both feasible options should the government enact a ban.
The anonymous party told CNBC:
In case the government shuts down all local exchanges, investors can always go abroad and open an account there. […] I can ask my friends who study abroad or travel there myself. It’s not that big of a problem.
Koreans have reacted fiercely to attempts by lawmakers to place restrictions on how they may trade cryptocurrencies. Government statements have contradicted ministerial comments that a full exchange ban is on the cards, but other limitations are set to become law this weekend.
https://twitter.com/8bitandstuff/status/953843050874224642
A petition to fire ministers responsible for the legislation and reverse the ban has so far gathered over 200,000 signatures.
A Seoul-based exchange representative noted:
All this could lead to serious money outflow and only the government is not aware of it.
State Insider Trading Under Investigation
The government’s hand has become significantly weaker meanwhile as news broke Thursday of alleged insider trading by officials who knew the restrictions would shortly be announced and prices would likely fall as a result.
"Some of Korea's Financial Supervisory Service Staff Openly Admit to Selling Out their Crypto prior to the Crypto BAN Official Statement". Insider trading is fine, thisisfine.jpg. Is anyone really surprised by this? #Bitcoin https://t.co/5cltBaNsAJ
— WhalePanda (@WhalePanda) January 18, 2018
According to local news media, the government has launched an investigation into the allegations, with a spokesman from the Financial Supervisory Service (FSS) admitting punishments were not guaranteed. This, somewhat ironically, is due to the unregulated status of cryptocurrency in South Korea versus more traditional assets.
There is no moral or ethical code for virtual currency investment in FSS regulations, so tangible punishment is unlikely to occur at this point.
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