South Korea’s Blue House has clarified that there is not a cryptocurrency ban being considered by the country. Even though two Korean Bitcoin exchanges were raided, the government is not planning to ban cryptocurrency any time soon. They even further clarified that many different government organizations would be coordinating to fully allow regulated cryptocurrency trading.
Yu Yong-seok, a spokesperson for the South Korean Ministry of Justice clarified to Korean press that their previous words were not indicative of the entire South Korean government’s stance he said that the position that cryptocurrency was only used for gambling “[…] is a position of the Ministry of Justice, not a government position.”
South Korea cryptocurrency trading ban won’t be happening in the short term
The political party currently in the Blue House, the South Korean equivalent of the American White House, commented:
“The government announcement should be based on detailed reviews and coordination. If there is a problem, we should warn and prepare in advance. “The behavior we showed today was the opposite. Minister of Justice Park Sang-ki, who is responsible for the announcement today, has lost confidence.”
Some are even petitioning for Attorney General Park’s removal from office. The South Korean Ministry of Strategy and Finance additionally revealed that they first heard of the supposed Korean cryptocurrency trading ban of 2018 through media reports – and were shocked. Cryptocurrency is at a size now that individual arms of government can’t act alone. Even in the United States, the different statuses of Bitcoin in different regulatory bodies has somewhat stifled innovation, even just at the federal level not including individual states’ additional requirements such as the BitLicense.
The Justice Ministry of South Korea has announced plans to ban cryptocurrency trading. While this is not a ban on the use and holding of cryptocurrency, the effect on exchanges is already being felt. Multiple Korean cryptocurrency exchanges have been raided by local tax authorities and police. The alleged crime? Tax evasion. The finance ministry had increasingly been looking into local cryptocurrency exchanges, especially as their activity grew to eclipse that of Korean stock exchanges such as Kosdaq. Korean official Park Sang-ki said at a press conference:
“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
Korean cryptocurrency exchanges raided by authorities
The two largest Bitcoin exchanges in Korea, Coinone and Bithumb, were raided during this past week. According to a Coinone employee that spoke to Reuters under conditions of anonymity, the exchange is cooperating with authorities on the tax matter. He said:
“Local police also have been investigating our company since last year, they think what we do is gambling.”
In addition to exchanges, the finance ministry is also looking into the banks that are providing virtual currency account services to exchanges, and possibly other companies. According to reports, six local bank are under the eye of financial authorities for offering such services.
Cryptocurrency Market Cap retreats on false news of Korean cryptocurrency trading ban
Since the release of this news, cryptocurrency markets across the world have reacted to the news negatively. Korean exchanges were a major driver of volume prior to these events, and were largely perceived to have captured the activity of other Asian cryptocurrency traders, such as those in China. Which cryptocurrency exchange becomes the top of the pack now, remains to be seen. One thing seems certain though, the days of the top volume exchanges being based in South Korea and driving the all time highs are long gone.