South Korea Bans Cryptocurrency Trade

South Korea Bans Cryptocurrency Trade

On January 10, the South Korean government publicly announced its plans to ban cryptocurrency trading within the country. The action might be taken due to suspicions over markets that evade taxes.

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On January 10, the South Korean government publicly announced its plans to ban cryptocurrency trading within the country. The action might be taken due to suspicions over markets that evade taxes.

The South Korean cryptocurrency market is one of the most demanding and the authorities are struggling to regulate the sector that generates massive gains in very short periods. Justice minister Park Sang-ki states the government is working on its plan to criminalize trading with digital assets on domestic exchanges.

The reaction from the community was fierce, to say the least. Maybe this is why the Presidential office clarified that the move is not yet finalized but is only discussed as a possible option. Other officials admit that discussions on the topic have been serious enough to take into an account the money-flows generated by cryptocurrency trade.

The regulation might happen only if the majority of the 297 members of the National Assembly vote for it. The whole process is time-consuming and may take several months. Nevertheless, the announcement triggered fear-induced sell-offs both on domestic and foreign exchanges. As a result, cryptocurrency prices plunged significantly even on Luxemburg-based Bitstamp.

According to Mun Chong-hyun, chief analyst at EST Security, the potential ban won’t stop keen traders and hackers from cashing out their funds. Furthermore, cryptocurrency craze has reached the level of gambling addiction, as stated by Park Nok-sun.

The Korean Blockchain Association admits that there are more than a dozen digital asset markets operating in the country. Despite cryptocurrency proliferation at large scale has attracted the attention of many financial institutions around the world, no central bank has expressed a desire to supervise the market.

Coinone and Bithumb, which happen to be the largest Korean exchanges, have been raided by tax agencies this week. They were accused of tax evasion. The finance ministry aims to find ways to regulate the market.

Some investors were wise enough to withdraw their money prior to raids. Apart from the actions of the authorities, the majority of the top-trending cryptocurrencies suffered severe falls as CoinMarketCap excluded South Korean exchanges from its database.

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