New South Korean Crypto Regulations
An estimated 20% of all bitcoin transactions take place in South Korea. The South Korean government has responded to this by expressing concerns about the volatility of bitcoin and other cryptocurrencies. Furthermore, new South Korean crypto regulations have been proposed to protect people from incurring potentially huge losses in the crypto-market. These announcements could have, at least partly, contributed an 11.6% drop in bitcoin’s price.
Is it fair that governments, in this case, the South Korean government, can indirectly manipulate or greatly affect crypto-market prices? Have these regulations really been put out there to serve the best interests of the South Korean people? Or, is the government just doing this because they perceive the crypto-market to be a threat to its financial stability?
Scope of South Korean Crypto Regulations
First of all, what is the scope of these new South Korean crypto regulations? Well, one of the things the government is working on is to outlaw cryptocurrency accounts operating anonymously. It’s possible that the reasons behind this could be to prevent tax evasion or money laundering. S. Korea’s government has also been planning to tax capital gains from crypto-trading.
Apparently, these South Korean crypto regulations will make it possible for regulators to shut down virtual coin exchanges as well. These regulations might be the government’s response to cryptocurrency exchanges like Youbit being hacked multiple times resulting in millions of dollars worth of losses. South Korea’s government has stated that these regulations are primarily put in place to regulate speculation involved with crypto-trading.
Reactions to South Korea’s Crypto-Trading
South Korea’s government described speculation in crypto-trading as “irrationally overheated” and “abnormal”. Cedric Jeanson, Founder of BitSpread, a fairly large bitcoin trading company, said that the South Korean crypto regulations were “quite positive” and “normal”. Also according to Jeanson, regulators are just doing what they’re “supposed to do” in order to maintain an “orderly market”. These remarks can’t be taken too lightly considering that BitSpread manages approximately $1 billion worth of crypto-trades per month.
South Korea’s Obsession With Bitcoin
According to the Financial Times, bitcoin traders in South Korea are paying up to 30% more than the average international rates. Asia Pacific’s analyst and Senior Currency Trader, Stephen Innes, thinks that these South Korean crypto regulations are in response to, not only Asia’s but the concerns of government regulators worldwide.
Mainly, these concerns are that the crypto-market and crypto-trading are becoming a “retail phenomenon” and we might want to think about “the absolute downside of a complete drop-in crypto means for the economy”. The message behind these words seems to be a bit vague and kind of ambiguous. It would have been better if they had explained exactly what a retail phenomenon is (in this case) and how it could possibly affect South Korea’s economy, or the global economy in general.
Some Questions To Think About
Are these concerns warranted? Will these new South Korean crypto regulations benefit the country’s citizens in any way or will they infringe on their rights? Will these regulations influence other world governments to take similar actions? We will all have to watch and study the crypto-market closely in order to make better understand the real motives behind all these regulations.