South Korea Imposing New Regulations Amidst Fraudulent Activity
It was only a matter of time before the shady crypto-market in South Korea felt the force of government regulation. Federal level regulations will be employed in an effort to dampen the effect of ill-willed activity without limiting the ability of sincere investors and traders.
A number of government organizations and influential figures met in early December to discuss the uncertain future of cryptocurrency in the Korean market. The meetings predictably ended in the agreement that certain principles would need to be established or else all involved parties, innocent or guilty, would be negatively impacted. A second, sensible but uncertain, aspect was to limit foreign and underage traders inside Korean exchanges.
This second point appears to be the primary point of conflict with the new actions being handed down over the coming months. Korean officials are looking to ban the opening of anonymous accounts. Insincere intentions from anonymous traders and hackers have been widespread through internet exchanges, most notably in Japan’s largest entities in the past year. Korea’s newest effort will allow the tracking of any users to help counter and resolve any future conflicts.
Officials are also looking to close down a number of Korea exchanges. The primary question at this point is which ones and how many. If all exchanges were to be shut down, it appears that Korean citizens involved would still have the freedom to partake in their own transactions, simply in remote markets. More likely is that certain exchanges with histories of questionable activity will be closed. Investors holding cryptocurrencies in those markets should have the time to liquidate or move any assets held, but there remains a fair amount of ambiguity in the decisions.
Many Korean institutions have expressed their own interest in the future of cryptocurrency. Whether there are ties to Bitcoin or altcoins such as Ripple, their influence will be enough to keep the crypto-market moving within South Korea’s borders.
Outside of Japan, South Korea has been among the heavy-hitters in crypto-headlines during 2017. Summer ICOs lifted a number of new coins into relevance and increased utility for growing altcoins over recent months again made waves.
The Financial Supervisory Service expressed that there would be some regulation last week, but it vehemently addressed the fact that the government does not recognize cryptocurrency as actual currency. With likely a low ceiling of legal tender coming down in the next couple fortnights, 2018’s open market for crypto should become much clearer.
Tokens are unlikely to see any major change as a result of the action as these moves are more in tune with protecting true investors, rather than inhibiting the market as a whole.