After a brief moment of concern for cryptocurrency traders in Asia, South Korea has now elevated fears over a ban. Many feared that Seoul – currently a leading hub in cryptocurrency exchange – would cease trading. Illegal trades and poor regulations are an issue in the region.
After a brief moment of concern for cryptocurrency traders in Asia, South Korea has now elevated fears over a ban. Many feared that Seoul – currently a leading hub in cryptocurrency exchange – would cease trading. Illegal trades and poor regulations are an issue in the region. Yet, South Korean officials are not going to enforce an outright ban – at least not at the moment.
Concern about the future of cryptocurrency trading in South Korea came after a sense of confusion over its future in the nation’s capital.
Government officials had appeared as though they weren’t quite on the same page regarding rumors of a ban in Seoul. This fear for local traders was only exacerbated by news from China, where their government now plans to ban cryptocurrency platforms entirely. If that was not enough, the value of bitcoin has decreased over the past couple of weeks because of these increased concerns and regulations. There was a drop of 27.1%, the largest in three years.
The good news here is that this issue was blown a little out of proportion. In fact, South Korea’s finance minister has gone on record as saying that there is no intention of banning or suppressing the cryptocurrency market in the capital. There are, however, new rules in place to try and improve the situation. For example, as of January 30th, cryptocurrency trading is only permitted from real-name bank accounts. This adds to regulations including the need for documentation on international exchanges over $3,000. Also, foreign exchange services are currently only permissible from licensed brokers and banks.
These rules are important because there are still issues to contend with in the South Korean cryptocurrency market.
At the time of reporting, customs officials claim that they detected around 637.5 billion won in criminal activity. Illegal FX agencies use electric wallets to collect funds and transfer them to other nations. There the money is cashed out and distributed under the radar – or so they assume. One such example saw a loss of 1.7 billion won. Then there is the other side of this international illegal trade. Japanese investors reportedly sent 53.7 billion in yen to South Korea in illegal transfers. This isn’t the end of the cryptocurrency woes for Japan, as the nation recently saw a $500 million cyber heist from Coincheck in Tokyo.
There are also concerns about the rights and impact of those diving into this new currency without experience or guidance. There are many housewives and students in Seoul that became caught up in the craze and excitement of these new currencies, without any plan or protection.
South Korean officials are aware of the need to monitor the situation carefully.
The finance minister, government officials, and customs agents plan to continue to monitor the situation. This means keeping a close eye on any illegal activity and ensuring the protection of legal traders. The current decision will please many traders that rely on this Seoul hub, as a ban would be a drastic step. However, the governments ongoing monitoring of the issue means that it might not be completely off the table.