South Korea Has No Intention to Ban Cryptocurrency Trading: Finance Minister
South Korea’s Finance Minister confirmed Wednesday that his country has no intention of banning cryptocurrency exchanges, extinguishing lingering fears about a harsher crackdown on the digital asset class.
In a statement reported by Reuters and CCN, Finance Minister Kim Dong-yeon said, “There is no intention to ban or suppress cryptocurrency.”
Dong-yeon’s assertion is the government’s clearest statement yet that cryptocurrency trading will remain legal in the country. It also brought some level of certainty over how regulations may evolve in the future.
On Tuesday, the government implemented its ban on anonymous trading accounts in an effort to tame speculation on domestic exchanges. The decision was announced last week following high-level meetings between government officials over how to better police the market. Ultimately, a ban on anonymous trading accounts was much more lenient than some of the other ideas put forward.
South Korea’s Justice Ministry has been the biggest source of opposition to cryptocurrency trading, and earlier this month floated the idea that domestic exchanges should be shut down. The ministry was forced to backpedal after a public statement from the president’s office assured market participants that a comprehensive ban had not been decided.
Impact on Markets
As one of the world’s biggest cryptocurrency markets, South Korea has an oversized impact on how digital assets are priced. Speculation about new trading restrictions triggered a huge selloff in the market, as bitcoin and its altcoin competitors shed hundreds of billions of dollars over a two-day slide that culminated on Jan. 17. Although the market has recovered from its lows, it has failed to regain the momentum seen through the first two weeks of the year.
As analysts have long argued, a blanket ban on cryptocurrency trading is unlikely to work in a country as technologically savvy as South Korea. That’s because traders can easily move their assets to any one of the global exchanges operating in a more regulation-friendly jurisdiction. That’s exactly what Chinese traders did when the central government shut down domestic exchanges.
Furthermore the chairman of South Korea’s Fair Trade Commission has argued that a ban on cryptocurrency exchanges would be a violation of e-commerce laws.
According to Kim Sang-Joo, shutting down crypto exchanges “is not realistically possible. Based on electronic commerce law, the government does not have the authority to close down cryptocurrency trading platforms.”
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.