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Conflicting Government Voices On Crypto Trading In South Korea

By

Jeremy

Nation

WriterETHNews.com

Investors and exchanges in South Korea were bracing themselves for what was understood as a potential government-issued ban on cryptocurrency trading; but conflicting reports from different parts of the government are now surfacing, leaving the global community rocking on its heels.

UPDATED | January 11, 2018 4:25 pm

On Wednesday, January 10, 2018, reports from some journalists indicated that some of South Korea's authorities were planning a ban on cryptocurrency trading in the country. Perhaps at least partially precipitated by this cascade of news reports, many cryptocurrencies began to decline worldwide as markets detected a disturbance in the crypto-Force. But continuous changes in published articles threw doubt on the accuracy and completeness of their stories, and were met with consternation by those holding cryptocurrency, who saw their balance's market value fluctuate wildly.

Initial reports explained that at a news conference, South Korean 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 Justice Ministry spoke of the impending ban (and, indeed, after the international market took a huge coinciding dip), local reports from South Korea's Ministry of Strategy and Finance (MOSF, a key member of the crypto task force) said that the MOSF does not agree with the "premature statement of the Ministry of Justice about a potential cryptocurrency trading ban." It seems that other government departments had only heard of the proposed ban through media reports, and hadn't been apprised of the Justice Ministry's plans. And if they only were clued in by media outlets reporting uncertain facts, it may even be that the Justice Ministry was misquoted.

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 the MSF disagreed, saying, "We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban."

Regardless of the "he said, she said" narrative, it takes time, potentially years, for the wheels of legislation to turn; a bill would require drafting, after which it would 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 competing announcements come 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." The current state of confusion prompted by a cascade of disinformation also points to potential herd behavior among journalists.

What made the rush to report alarming crypto news such a no-brainer for news outlets? The reported actions by authorities in South Korea fit the narrative from the region, whose officials have recently clamored for more restrictive regulations as well as multi-national cooperation.


ORIGINAL | January 11, 2018 12:14 pm


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 Justice Ministry spoke of an impending ban (and, indeed, after the international market took a huge coinciding dip), local reports from South Korea's Ministry of Strategy and Finance (MOSF, a key member of the crypto task force) said that the MOSF does not agree with the "premature statement of the Ministry of Justice about a potential cryptocurrency trading ban." It seems that other government departments had only heard of the proposed ban through media reports, and hadn't been apprised of the Justice Ministry's plans.

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 the MSF disagreed, saying, "We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban."

Regardless, it takes 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.

Jeremy Nation

Jeremy Nation is a writer living in Los Angeles with interests in technology, human rights, and cuisine.

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