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South Korea Has No Intention to Ban Cryptocurrency Trading: Finance Minister

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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.

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No Ban

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.

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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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 165 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Regulation

Robinhood Now Offers Cryptocurrency Trading in These Five States

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Popular stock trading app Robinhood has officially rolled out its cryptocurrency trading platform to users in five U.S. states, setting the stage for greater mainstream adoption of the digital asset class.

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Robinhood Rolls Out Crypto Exchanges

As of Thursday, traders who pre-registered for Robinhood Crypto platform will receive emails inviting them to participate. As CCN reported last month, initial access to Robinhood Crypto will be limited to users in California, Massachusetts, Missouri, Montana and New Hampshire. One million users registered for the program in less than a week.

In a statement issued Thursday, Robinhood said:

“Over the past few weeks, we’ve been overwhelmed by the enthusiasm towards Robinhood Crypto and are excited to contribute to the cryptocurrency community in a meaningful way… With the release of Robinhood Crypto, we’re continuing our mission of making the financial system work for everyone, not just the wealthy.”

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Designed for beginners, Robinhood has emerged as one of most popular trading apps on the market. In addition to cryptocurrencies, the platform offers access to stocks and exchange-traded funds (ETFs). The new crypto platform will not charge commission, but will include trading fees.

U.S. Exchange Regulation: Where We Stand

In the United States, cryptocurrency exchanges are regulated at the state level, which means they are not directly governed by the Commodity Futures Trading Commission (CFTC) or any other federal body. Exchanges must therefore apply for a license to operate in individual states. For example, San Francisco-based Coinbase has obtained licenses from 35 states, the District of Columbia and Puerto Rico, which is an unincorporated U.S. territory.

Federal securities regulators are nevertheless monitoring the cryptocurrency market for signs of fraud and suspicious behavior. In the case of the CFTC, regulators have investigative powers to subpoena exchanges like it did in December by summoning Bitfinex and Tether to court.

The commodity regulator has also issued a warning about pump-and-dump schemes involving cryptocurrency. The form of security fraud is becoming more common with the growth of mobile chat groups and internet message boards.

The CFTC has received criticism from the financial community after it granted CME Group and CBOE the right to launch bitcoin futures last December. The assets are seen by many as a precursor to greater mainstream adoption of the digital asset class.

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 165 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Regulation

Coincheck Hack Prompts Japanese Crypto Exchanges to Self-Regulate

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Several Japanese cryptocurrency exchanges have joined forces to form a self-regulatory body in an effort to better protect investors following last month’s attack on Coincheck, which resulted in the loss of hundreds of millions of dollars.

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Japan Embraces Self-Regulation

A total of sixteen exchanges will work on a new self-regulatory regime to be implemented as early as next week, according to Reuters, which cited two sources familiar with the discussions. The new body will govern exchanges currently registered with Japan’s Financial Services Association (FSA), and will replace a previous proposal to merge two separate bodies – the Japan Cryptocurrency Business Association and the Japan Blockchain Association.

Japan is known to be one of the most favorable jurisdictions for cryptocurrency regulation after the government formally recognized digital currency as a form of money. Since last year, the FSA has been primarily responsible for issuing licenses to domestic exchanges.

Coincheck Heist

Concerns over safety have preoccupied exchanges since hackers made off with over $500 million worth of NEM tokens last month. The attack, which targeted Tokyo-based cryptocurrency exchange Coincheck, resulted in the largest monetary loss in history. About 523 million units of NEM were illegally redirected from the exchange in a theft that impacted some 260,000 traders. Coincheck later announced it would compensate traders for the stolen funds at a rate of 81 U.S. cents per NEM unit.

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Since the heist, hackers have successfully sold $84.7 million worth of NEM tokens, pushing the value of the token lower. The coins have reportedly sold on the dark web at a discount of 15%, according to Asian Review Nikkei. The NEM Foundation has said it is tracking where the coins are being transferred, although the number of accounts receiving stolen funds is growing rapidly.

When measured in terms of market cap, NEM is currently ranked 13th among active cryptocurrencies with a total value of $4.5 billion. At the time of writing, the coin was valued at roughly 51 U.S. cents per unit. The majority of NEM’s trade volume is handled by South Korean exchanges, with Upbit alone accounting for roughly 41% of total transactions.

In the wake of the attack, Japanese regulators announced they would conduct on-site expectations at unlicensed cryptocurrency exchanges. However, it remains unclear whether these platforms will join the effort to self-regulate the market.

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. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 165 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Regulation

U.S. Crypto Regulation Unlikely to Materialize in the Near Future: White House Official

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For all the doomsday scenarios surrounding cryptocurrency regulation, the United States is unlikely to adopt any of its own in the near future, according to a top White House official.

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Not Close on Crypto Regulation

In a Friday interview with CNBC, White House cyber security coordinator Rob Joyce said new regulations for the digital asset class remain far off the table. To arrive at meaningful regulation, the powers that be must still unravel the benefits and drawbacks of the new asset class.

“I think we’re still absolutely studying and understanding what the good ideas and bad ideas in that space are,” Joyce said at the Munch Security Conference in Germany when asked about the future of government regulation. “So, I don’t think it’s close.”

He added: “We are worried. There are benefits to the bitcoin concept — digital cash, digital currencies. But at the same time, if you look at the way bitcoin works after there is a criminal act that takes place, you can’t rewind the clock and take back that currency.”

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Where We Stand on Regulation

Joyce wasn’t the first White House official to chime in on cryptocurrency. Last month, Treasury Secretary Steven Mnuchin raised warning signs about the new asset class, telling an audience at the Economic Club in Washington that regulators are investigating illegal activities involving cryptocurrency. He also indicated that the Financial Stability Oversight Council had assembled a working group to explore the evolving marketplace.

Meanwhile, the nation’s top securities regulators testified before the Senate earlier this month, but gave no timeline for a new regulatory regime. In fact, the heads of the CFTC and SEC struck a cautiously optimistic tone when describing the future of the cryptocurrency market. However, Senate Banking Committee Chair Mike Crapo indicated that regulators may need more powers to control offside behavior.

With the exception of initial coin offerings (ICOs), the cryptocurrency market has gotten off easy in the United States. Last December, the CFTC became one of the world’s first regulators to recognize bitcoin derivatives, a move that many say will open the door to wider mainstream acceptance.

Crypto regulation will be on the agenda next month at the Group of 20 Summit in Buenos Aires. Officials from France and Germany are expected to table a proposal demanding a broad clampdown on the market, although precise details have yet to materialize.

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 165 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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