On December 13, 2017, senior officials from a handful of South Korean government ministries and agencies gathered for an emergency discussion regarding the cryptocurrency boom.
According to a statement obtained by Reuters, the South Korean government plans on banning minors (young people, not those who mine) from opening accounts with cryptocurrency exchanges. The country is also examining the possibility of taxing capital gains from virtual currency trading. Both measures would require parliamentary approval.
Representatives from the following entities were in attendance:
- Ministry of Justice
- Ministry of Finance
- Ministry of Science and ICT
- Financial Services Commission
- Korea Communications Commission
- Korea Fair Trade Commission
- National Tax Service of South Korea
On South Korean cryptocurrency exchanges, tokens frequently trade at significant premiums.
For example, at the time of writing, bitcoin is trading at $16,950 on Bithumb and $16,938 on Coinone, but CoinMarketCap reports the global price of bitcoin as $16,744. That means bitcoin is trading at nearly a $200 premium in the South Korean markets.
Similarly, though by a smaller magnitude, Ether is trading at $701 dollars on Bithumb and $704 on Coinone, but CoinMarketCap reports the global price of Ether as $694. If a person found a way to arbitrage these price differences, that person could make a sizeable chunk of change.
According to some reports, the South Korean government is due to announce its actions on Friday. Given the large volume that is traded on such exchanges, it's possible that new cryptocurrency regulation could reduce prices in the near-term. (Please note: this is not financial advice.)
Yesterday, ETHNews reported that the Korean Communication Commission fined Bithumb 60 million won (approximately $55,000) for insufficient protection of user data. Also, South Korean regulators recently acted to prevent cryptocurrency derivatives from being offered in the country.