‘Nothing Finalized’: South Korea Gov’t Ministries Diverge Over Crypto Ban Proposal
Mass confusion after reports broke that South Korea is planning to ban cryptocurrency trade in the country, local reporters call fake news, say “nothing is finalized”
Conflicting reports today, Jan. 11, have led to confusion after a South Korean minister announced plans of a bill intended to ban cryptocurrency trading in the country.
According to Reuters, South Korean officials are working on documentation that will make it illegal to trade virtual currencies on local exchanges.
The country’s Justice Minister Park Sang-ki said the decision comes in the wake of discussions and agreements between governmental departments, including its Finance Ministry and financial regulators.
Reuters reported that Sang-ki announced the ban in a press conference, stating:
“There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
However, South Korea-based Cointelegraph contributor Joseph Young reported on his personal Twitter today, citing local sources, that the South Korean Ministry of Strategy and Finance does not agree with the proposal from the Ministry of Justice to ban cryptocurrency trade in the country. Young reports that a final decision has yet to be made.
South Korea Ministry of Strategy and Finance (MSF)— Joseph Young (@iamjosephyoung) January 11, 2018
"We do not share the same views as the Ministry of Justice on a potential #cryptocurrency exchange ban."
MSF is upset MoJ released premature statement.
As reported on Dec. 25, South Korea set up a task force to create legislation for the rapidly growing crypto market in the country. Contrary to an outright ban, the body plans to regulate cryptocurrency exchanges as legitimate financial service providers, and ban foreigners and underaged investors from trading on South Korean exchanges.
FUD leads to sell-off
The popularity of cryptocurrency trading in South Korea has seen the price of virtual currencies trading far higher than exchanges in different countries.
Nevertheless, the minister’s remarks led to a sell-off of cryptocurrency. The Bitcoin (BTC) price in South Korea plunged 21 percent down to $17,064. This lower BTC price in South Korea is still far higher than the average Bitcoin price on CoinMarketCap ($13,501 at press time), which excludes South Korean exchanges, due to the divergence in prices of cryptocurrencies in the country.
As of late December 2017, South Korea accounts for up to a fifth of global cryptocurrency trade.
‘Raids’ on exchanges embellished
Reuters also reported Jan. 11 that South Korea’s largest cryptocurrency exchange operators were “raided” by police and tax authorities amid allegations of tax evasion this week.
According to Reuters, an official from the popular South Korean exchange Coinone said authorities regarded exchange operators in a negative light:
“Local police also have been investigating our company since last year; they think what we do is gambling.”
Once again, word from correspondents inside South Korea is that the reports of a “raid” are not accurate, and have been embellished by mainstream media outside the country.
Cointelegraph’s South Korea correspondent this time retweeted CNBC’s Cryptotrader host Ran Neuner, confirming that the so-called “raids” on exchanges were actually just routine visits from tax authorities. Young notes that local media are calling the “raid” an “unexpected friendly visit”:
Fake News Reuters claiming South Korean #cryptocurrency and #Bitcoin exchanges were raided by police.— Joseph Young (@iamjosephyoung) January 11, 2018
While local reporters and other media outlets are reporting it was an unexpected friendly visit.
Raid means something completely different @Reuters https://t.co/0c9NOApSKY
Another South Korea-based trader noted on Twitter that the situation was a result of confusion both on the part of authorities and the exchanges themselves, who are reportedly willing to comply if given applicable legislation is put into place:
“There's a lot of confusion on all sides, gov. and exchanges.”
On the fiat side of things, on Jan. 7 local South Korean media reported that the country’s authorities were planning to probe six major banks to look for alleged money laundering linked to cryptocurrency exchanges.