South Korea Downplays Fears of Crypto Ban After Public Backlash

In its clearest statement yet, the government of South Korea has vowed to let cryptocurrency exchanges continue operating freely in the country, easing fears of a crackdown in one of the world’s biggest digital currency markets.

No Crypto Ban

Instead of an all-out ban on domestic exchanges, policymakers are no focusing on making cryptocurrency trading more transparent, according to Hong Nam-ki, Minister of the Office for Government Policy Coordination.

“I can assure you that the government has consistently maintained a close and careful approach to market conditions and international trends, keeping all possible means open,” he said in a statement that was quoted by CCN.

The Minister said his administration is working on a swift response to any illegal activities involving cryptocurrencies, adding: “It is the basic policy of the government to prevent illegal acts and opacity in the process of virtual currency transactions.”

The announcement comes just two weeks after regulators blocked anonymous traders from accessing crypto exchanges, a decision that was far less severe than what traders had feared. Worry over an “imminent crackdown” on cryptocurrency exchanges triggered a mass exodus from the digital currency market, with hundreds of billions of dollars fleeing global exchanges.

Traders Influence Policy

The government clarified its position on cryptocurrency after a petition with nearly 300,000 signatures denounced an earlier proposal to ban domestic exchanges. The proposal was first issued by the Justice Ministry, but was immediaterly struck down by the president’s office, which clarified that a ban was only one of several measures being considered.

Mainstream media took the story and ran with it, with various outlets reporting that an imminent clampdown was in the works. A similar misunderstanding occurred earlier this month after India’s finance minister said more needs to be done to curb illicit activity involving digital currency. Several news sources too this to mean that an all-out ban was being proposed.

Cryptocurrencies were trading firmly to the upside on Wednesday, with the market’s total value hitting $452 billion, according to CoinMarketCap. That’s a gain of more than 7% over the past 24 hours. All the major coins traded sharply higher, with bitcoin, Ethereum and bitcoin cash climbing between 7% and 11%. Meanwhile, Ripple rose 11.6% and Litecoin surged 30%.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi

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