advertisement

Why Is South Korea Suddenly Becoming Anti-Bitcoin?

bitcoin in south korea | latest bitcoin news | bitcoin news and updates | latest cryptocurrency news

South Korea Adopts A Fighting Trend To Oppose The Uninterrupted Flow Of Bitcoin – Here’s Why

Bitcoin has been termed by many as the greatest technological breakthrough of the millennium just next to the massively popular internet. Its growth statistics is also somewhat similar as internet had also received initial opposition from various expert groups much like bitcoins which could not please everyone. South Korea had initially been quite welcoming to the Bitcoin phenomenon but recently it has taken up a negative stand by bringing forth stringent regulations which could completely bottleneck the growth prospects of this crypto form and their economy as a whole. It also banned ICO’s few months back, immediately after China became the first one to take that decision. But why is is that first South Korea was welcoming cryptocurrencies like Bitcoin and now going totally against it? Let’s discuss the background factors which caused South Korea to reverse its take on Bitcoins.

Certain market observers hold the view that there exists plenty of factors which have caused the government to grow wary of the bitcoin phenomenon with the greatest being the hard-core potential of the crypto token for being used for notorious reasons by Kim Jong-un, the North Korean leader as an economic weapon. The leaders however have spoken about other evident concerns also. The South Korean Ministry of Justice revealed on Thursday that the country is pondering over pulling down the shutters of all its crypto exchanges. This announcement has sent shockwaves spiralling across the country.

Also Read: Police Confirms North Korea Did Attacked South Korean Bitcoin Exchanges

Bloomberg reported that the stock price of Pareteum, an internet service provider doubled more than twice earlier this week after it made an announcement of providing blockchain support services. However, in the aftermath of Seoul’s comments, the stock price toppled down the ladder by 25%. South Korean minister for government policy coordination, Hong Nam-ki, termed the excessive interest of its nationals in the cryptocurrency as “abnormal” speaking in sync with Lee Nak-yeon the Prime Minister who revealed that a “social pathological phenomena” can corrupt the Korean youth.

The price of cryptocurrencies in Bithub, the Korean cryptocurrency exchange fell by 13.8% to US$17,400 from US$20,181 after the announcement made by Hong. Others have also been following in the footsteps of Bithub. According to a report published by Korea Biz Wire, KB Kookmin and Shinhan, two of the largest banks of Korea announced this week that starting from mid-January it shall no longer support the redemption of credit card points for bitcoin. Such instances are taking shape after the trading of bitcoin futures was banned by authorised officials in South Korea in December and emergency measures were drafted for prohibiting foreigners, minors and banks from engaging in bitcoin trading.

The fact that Bitcoin has swelled in value by approximately 20 times starting from the beginning of 2017 is posing as a cause of concern directing at its extreme price volatility. The price curve of Bitcoin reached records heights in early December when its value doubled to almost US$20,000 which thereafter sustained a 30% fall to below US$11,000 and finally stabilising at around US$15,000. Irrespective of the extreme fluctuations, institutional and retail investors have been participating in this crypto movement which is posing big challenges to fiat currency mode and banking operations worldwide. Samsung had announced a blockchain backed project back in May which shall act as the platform for all other cryptocurrencies to function seamlessly and will help in tracking shipping orders on a real-time basis.

Dunamu, a fintech start-up was acquired by Kakao, maker of the country’s leading messaging application for launching its very own crypto exchange called Upbit in October. Nexon, a video gaming mammoth presently holds the biggest portion of Korbit shares which incidentally is also the third-largest crypto exchange of South Korea. Thus, if a ban is imposed by the South Korean regulators then all such projects shall also be stalled decreasing the lure of bitcoin in its neighbouring Asian countries and triggering a domino effect.

Bitcoin operates without the authority of any government or banking body to look after its operation. It is the underlying technology behind the Bitcoin i.e, Blockchain which makes it difficult to hack and allows users in engaging into transactions without the need of any intermediary body. Such advancements in the field of technology is promising seamless transactions without having to spend much time and money for fostering the same. Such antics is upsetting the traditional exchange and financial services markets of South Korea which is losing its shine to the comparatively nascent digital token system.

The world’s third-largest Bitcoin trading market South Korea preceded by Japan and United States comprises 20% of the global bitcoin trading. South Korea’s recent change of heart comes at a time when several other countries worldwide are closing their gates to the bitcoin phenomenon. The Israeli Securities Agency announced on 25th December that companies cannot engage in bitcoin trading anymore in its Tel Aviv stock exchange.

Bitcoin has been branded as illegal in Bolivia, Morocco and Ecuador. Similar concerns have spread over Asia as countries like Bangladesh, Kyrgyzstan and Nepal has planted the illegal stamp on bitcoin trading. China had been one of the frontrunners of this anti-bitcoin movement. It brought ahead a complete lock down on all crypto exchanges by banning initial coin offerings in September. Such a step was taken by the nation at a time when the Chinese dealings constituted a whopping 90% of the global bitcoin transactions.

Recently, the Indian Finance Minister also termed Bitcoin as a Ponzi Scheme and advised Indian investors to stay out of cryptocurrencies,

Haruhiko Kuroda, the governor of Bank of Japan added fuel to the fire when he termed this massive surge in price of bitcoins as “abnormal.” He also cited the associated dangers of speculative investing. The Indian Central Bank had also been very apprehensive about the issues of money laundering and tax evasion which had been taken up by the unscrupulous lot by hiding behind the anonymous bitcoin mode.

Indonesia is also planning to bring forth a ban on crypto operations in 2018. Similar plans are also being made by the Vietnamese officials. Speculative investors were warned last week by the Singaporean authorities about the extreme risk of losing “all their capital” given the volatile nature of cryptocurrencies which can cause the price bubble to burst any day.

Once South Korea assumes a completely opposing stance in regards to bitcoin and similar cryptos, such cracks in confidence will widen further. Concerns about fraud which have multiplied in the recent turn of events are also legitimate fear factors. MiningMax, a US$200 million cryptocurrency Ponzi scheme and BitKRX the bitcoin exchange was busted by the police in December after evidences surfaced linking them with frauds. In the aftermath of this incident, authorities received greater reasons to seek out enhanced regulations amidst people hinting at the same as a means of protectionism. Sean Hayes penned down in a Korean Law Blog post published on November 2016 that, “Korea has struggled with the acceptance of new technologies that infringe on some of the major vested interests and we suspect that bitcoin will be no different.”

The existential threat posed by hackers from North Korea who have already found their way inside South Korean exchanges and wallets earlier serve as greater causes of concern. Hacking caused Youbit to pull down its shutters in December when it reported a loss of client holding’s worth one fifth of its total corpus. It had also lost US$35 million following an attack in April. The company did not reveal any details about the attack but clouds of suspicion seems to be circling around Pyongyang. Four South Korean exchanges have been hacked in the last summer including Bithumb, the biggest in South Korea, with the North Korean hackers being suspected to be the main causes behind the same.

KryptoMoney.com publishes latest news and updates about Bitcoin, Blockchain Technology , Cryptocurrencies and upcoming ICO’s.

Subscribe to our newsletters and join our Telegram Channel to stay updated.

Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.

 

Get Latest Cryptocurrency And Bitcoin News

Signup this form below to get latest Cryptocurrency and Bitcoin news, directly in your mailbox

Note:

Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.