South Korean Government Will Not Implement a Cryptocurrency Trading Ban
The South Korean government will not impose a ban on cryptocurrency trading after all, contrary to the claims of Park Sang-ki, the head of the Justice Ministry.
Earlier on January 11, Justice Minister Park stated that the Justice Ministry is drafting a bill that would effectively ban cryptocurrency trading for both foreigners and citizens. In a press conference, Justice Minister Park emphasized that the ministry plans to control speculation in the cryptocurrency market by outright banning cryptocurrency trading.
Immediately after the statement of Justice Minister park was released, the Ministry of Strategy and Finance noted that it was only made aware of his statement through media reports and that it does not reflect the viewpoint of the government. The Ministry of Strategy and Finance went on to say that the agency does not support and agree with the premature statement Justice Minister Park.
The price of bitcoin and other cryptocurrencies have fallen on the news, with BTC-USD breaking below the $13,880 support. Further support lies at the December 30, 2017 low at $12,050. Other major cryptocurrencies like ether, litecoin, and monero are all down between four to 12 percent on the day.
BTC-USD (4-hour, Bitstamp)
Upon the release of the official announcement of the South Korea Ministry of Strategy and Finance, the country’s citizens and cryptocurrency investors submitted petitions to the Blue House, the executive office of President Moon Jae-in, to oppose the cryptocurrency trading bill proposed by Justice Minister Park. More than 100,000 investors signed several petitions, with the most popular petition obtaining nearly 72,000 signatures.
In the afternoon of January 11, the South Korean government made an official announcement to the public through the Blue House that it will not impose a cryptocurrency trading ban in the short-term, and that the premature statement of Justice Minister Park does not reflect the stance of the South Korean government.
The Ministry of Strategy and Finance along with the country’s central bank have reaffirmed that the cryptocurrency mania and increasing speculation can only be controlled through efficient regulations and practical policies, not through a ban on trading.
More importantly, the South Korean cryptocurrency exchange market is processing a daily trading volume that is twice larger than the country’s main stock market KOSDAQ. The economic impact of any country or government abruptly shutting down its stock market would be in the billions. In South Korea, the closure of cryptocurrency exchanges would lead to a similar magnitude of losses.
In late December, the South Korean government’s cryptocurrency task force formed by the Ministry of Strategy and Finance, Financial Services Commission, Ministry of Justice, Fair Trade Commission, and Financial Supervisory Commission stated that it would follow the regulatory roadmap established by major regions such as Japan and the US.