This is the second time in the past few weeks when misleading news out of South Korea has sent the crypto markets down double digits.
South Korea’s justice minister Park Sang-ki stated in quotes reported by local publication Yonhap News:
“The ministry is preparing legislation that basically bans any transactions based on a virtual currency through the trading floor. We have grave concerns about [the craze over] virtual currency and [a shutdown] would be one of the goals we are aiming for.”
Park further elaborated that he is concerned South Koreans have an unhealthy relationship with cryptocurrency, stating:
“It has started to resemble gambling and speculation. The fact that media have used the phrase ‘Kimchi premium’ reflects foreigners’ assessment that the Korean market is abnormal.”
Accurate Reporting or Spreading FUD?
Many people on Twitter are convinced that these quotes are being taken out of context by the mainstream media and that the South Korean government wants to further regulate but not ban cryptocurrency trading entirely.
– South Korean gov. looking to put in place crypto specific tax and consumer protection laws.
– Also, figuring out how they should classify crypto.
– While all this is being done, they're are going to continue to scrutinize and warn people, but NO official moves to stop or ban.
— John Cho (@johncho81) January 11, 2018
CNBC Cryptotrader host Ran Neuner further elaborated that the government will be focusing on regulation and not an out-right ban.
South Korea is not North Korea. South Korea is not China. South Korea is promoting business and growth. There is a huge fintech scene and many serious investors. They are a highly regulated country with a strong gvt and enforcement.
— Ran NeuNer (@cryptomanran) January 11, 2018
While local reporters and other media outlets are reporting it was an unexpected friendly visit.
— Joseph Young (@iamjosephyoung) January 11, 2018
The cryptocurrency market in South Korea is estimated to account for 20-25 percent of the global trading market. The country is home to over 20 currency exchanges.
Disagreement Within the Government
Countering the South Korean Justice Minister, the South Korean MInistry of Strategy and Finance emphasized that it does not agree with the proposal, stating:
“We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban.”
It remains to be seen exactly what additional regulation will be enforced upon South Korean crypto traders but, if anything, it is a reminder how misleading statements taken out of context can easily affect the cryptocurrency markets.
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