What a day! The crypto market saw a rollercoaster of a ride today, after confusion arose in South Korea where the government has started to intensify its moves against Bitcoin exchanges in the country.
More misunderstanding arose after a South Korean minister announced plans for a bill intended to ban cryptocurrency trading. These moves were not entirely unexpected considering how things have gone there the past few weeks.
But they did result in a lot of volatile movements, with prices falling across the board.
Let’s start with the exchanges first. Apparently, police and tax office officials visited the offices of Bithumb and Coinone on Wednesday and Thursday — two of the largest exchanges in South Korea. News reports claim that they raided the offices amid investigation into alleged tax evasion.
But it’s nothing new.
According to a Coinone employee, local police has actually been investigating the company since last year, thinking that what they do is gambling. While a Bithumb representative confirmed that the National Tax Service visited the exchange.
And they were not raided by the police.
Then again, raid is a strong word — these were actually routine visits from officials in order to make sure that the exchanges were complying with local rules and regulations. And only these two exchanges were in picture, the other Korean exchanges have been operating normally.
Ministry of fear
Sadly, the same can’t be said of the other government departments. There are signals that the South Korean Justice Department is planning legislation that could result in exchanges in the country to be shut down entirely.
A bill is forthcoming, the say:
“The Ministry of Justice will set up its own bill, which sees the virtual money brokerage itself as illegal and completely closes the exchange, and plans to start full-fledged ministry discussions this week.”
“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
These developments, nevertheless, are signs of the growing scrutiny that South Korean regulators are applying to the crypto exchange space.
It was mere days ago that the Korean Financial Intelligence Unit and the Financial Supervisory Service announced that they were inspecting six unnamed banks for anti-money laundering and know-your-customer regulations.
The government basically wants to curb anonymous trading at these exchanges, which have been seeing growing trade volumes with each passing month.
Easier said than done
All that said, there are voices claiming that the South Korean Ministry of Strategy and Finance does not agree with the Ministry of Justice to ban cryptocurrency trade in the country. In fact, there are reports that a final decision has yet to be made.
South Korea actually set up a task force to create legislation.
Reports of which came out on December 25, revealing that the government is concerned about the scams in the Bitcoin market. And contrary to an outright ban of the rapidly growing crypto market in country, the body plans to regulate cryptocurrency exchanges as legitimate financial service providers.
With the ultimate goal of banning foreigners and underaged investors from trading on South Korean exchanges.
That nevertheless did nothing to calm the nerves of investors. The minister’s remarks led to a selloff of cryptocurrency, not just in South Korea but in the United States as well, along with perhaps a number of other markets.
The prices recovered quick.
But what a day!