On Thursday, January 11, 2018, reports from South Korea indicated that some of the nation’s authorities are planning a ban on cryptocurrency trading in the country.
At a news conference, Justice Minister Park Sang-ki stated, “There are great concerns regarding virtual currencies and the Justice Ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
However, after the announcement was made (and, indeed, after the international market took a huge coinciding dip), remarks from the country’s presidential office clarified that the ban had not been finalized and was among measures being considered. Contradictory statements from a press official at the Justice Ministry declared that the proposed ban was announced following “enough discussion” among government agencies and regulators.
But it will still take time, potentially years, for the wheels of legislation to turn; the bill will require drafting, after which it will need to win a majority vote from the National Assembly before it could become a law.
Something that took hardly any time at all was the immediate backlash from citizens aimed at South Korea’s official presidential Blue House website; heavy traffic temporarily disabled the site and by Thursday afternoon, 55,000 South Koreans had signed a petition requesting a stay on the crackdown.
The announcement comes just after investigations into cryptocurrency exchanges Bithumb and Coinone were launched by the National Tax Service. An official at Bithumb told the press, “We were asked by the tax officials to disclose paperwork,” while Coinone says it is cooperating with investigative efforts.
Additionally, South Korea’s Financial Services Commission has been conducting onsite inspections of six local banks that offer cryptocurrency-related account services.
Park Nok-sun, who analyzes cryptocurrency at wealth management firm NH Investment & Securities, maintains that the officials are concerned by so-called “herd behavior” in the cryptocurrency marketplace. “Some officials are pushing for stronger and stronger regulations because they only see more (investors) jumping in, not out.”
Investors in the country are preemptively reacting to the proposed ban. 23-year-old Eoh Kyung-hoon, said, “I have already cashed most of mine (virtual coins) as I was aware that something was coming up in a couple of days.”
The actions by authorities in South Korea fit the narrative from the region’s officials, who have recently clamored for more restrictive regulations as well as multi-national cooperation.