On January 11th, Minister for Justice Park Sang-ki was quoted as saying that a proposal for banning cryptocurrency trading had been submitted in South Korea. Being one of the world’s leading crypto trading markets, this had a massive impact on markets around the world. Indeed, every single one of the top 10 currencies by market capitalization suffered drops, with Cardano falling by 14% or $11 billion in terms of market cap.
The punchline, though, is that this could all have been avoided if Sang-ki’s remarks had not been misreported. Now, Yonhap, a news agency in South Korea, have moved to clarify the government’s position.
What Is the Official Line?
South Korea are not banning crypto-trading; at least not yet anyway. While the South Korean government are perfectly happy to accept that this was discussed, the official line is:
Monday’s announcement suggests that a shutdown is not likely in the near future.
The news will come as a relief to hundreds of thousands of people, especially South Korean traders and investors. Last week, a petition to stop any potential bans, and to fire the Ministry of Justice, attracted 150,000 signatures. In South Korea, any petition that gets past the 200,000 mark requires an official response from the Blue House.
However, the announcement that no ban is imminent was accompanied by further regulations from the government. Following the recent move to ban anonymous trading, the financial authorities have now announced that they will fine anyone who refuses to comply, and convert their virtual accounts into named accounts. History tells us that the fines could be significant – perhaps more than half of an investor’s holdings, so there isn’t expected to be a great deal of resistance, although there may be a backlash of complaint down the line.
And what of the markets? Well, at the time of writing, most currencies were on the road to recovery. Cardano, the worst hit, was up by 10%, with Bitcoin up by 6%. NEO has been the days biggest mover though, with a whopping 19% gain in the last 24 hours alone.
Image Credit: Deposit Photos
Do you think a ban in South Korea is only a matter of time? What would the long-term effects be? Let us know in the comments below.