5 min read

South Korea Bitcoin Trading Ban: Just Rumors, Or Something More?

By Editorial Team

Ever since China banned Initial Coin Offerings (ICOs) and cryptocurrency exchanges a few weeks ago, crypto investors the world over have been a bit paranoid.

We’re all wondering: could the next black-swan regulatory ban drop at any moment? And if so, in what nation?

Naturally, from an investment perspective, we can all stomach bans in smaller nations that have little bitcoin buying volume. Say Portugal, for instance. The more worrisome fear is that a nation of great consequence for global BTC volume like South Korea could drop the banhammer, as it were.

And that would definitely be a devastating blow for the crypto market, as South Korea is driving a titanic, outsized proportion of the global BTC buying volume in recent weeks (which has, in turn, helped to drive the price up).

So whispers have been accruing, and FUD (“fear, uncertainty, doubt”) spreads. Could South Korea be next?

Today, then, we’ll give you the lowdown on just how worried (or not worried) you should be.

South Korean regulators launch new regulatory task force

Just days ago, a lot of chatter was set off when South Korea administrators declared the creation of a “virtual currency countermeasure task force.”

The word “coutnermeasure” didn’t exactly inspire confidence in South Korean investors, as you can imagine.

But it turns out that the task force is more protective than anything, at least according to the “fine print.” Per South Korea’s Finance Minister:

“We will make regulations for the protection of investors rather than making virtual currency exchange regulations.”

So now cause for losing our minds just yet.

Trading on Bitcoin futures now banned in the nation

Another relevant development came as South Korean regulators just announced that bitcoin futures will not be allowed to be legally traded or issued in the nation.

Even still, that’s not even directly related to an actual “Bitcoin ban,” as BTC futures are a different, and more traditional, beast altogether.

And even less alarming is the fact that the futures ban seems all but temporary. The nation’s Financial Services Commission (FSC) issued the ban “worrying about … if it gets out of control as they haven’t taken a position on cryptocurrency.”

In other words, while the FSC is still making up their mind on cryptocurrencies in general, they want domestic traders to hold off on the more traditional investment option of Bitcoin futures, a wave of which are being issued in the coming weeks through Nasdaq and the CME Group.

S. Korean govt. moves forward on crypto taxation

Also getting South Korean crypto investors attention is the news that the country’s National Tax Service (NTS) is beginning to take steps to implement an income tax on cryptocurrencies.

While such notable regulation always gets investors’ attention, in this case this regulation is good, in that it shows Bitcoin and other cryptocurrencies as being brought into the regulatory “daylight.”

Per the NTS:

“We will pursue taxation on virtual currencies such as bitcoin. Since virtual currency is a kind of property such as real estate or securities, it should be taxed according to the principle that ‘there is a tax on income.'”

Nation reversing ICO ban?

The latest breaking news out of South Korea is that officials there are coming close to reversing the domestic ICO ban that had been instituted just weeks ago.

Notably, though, Korean regulators are looking at potentially only allowing professional investors to facilitate ICOs in the nation going forward:

“Bitcoin is complicated in its technology and investment method. So considering its risk and technology expertise, it is right for professional investors to do an ICO, not regular citizens who are not informed of its technology and complicity.”

We’ll have to see how that dynamic plays out.

Overall: things aren’t dire in South Korea right now

In crypto you never know what’s coming next, but it looks like rumors have been flying in South Korea mainly because so many regulatory developments have been happening. People have a hard time keeping up or understanding, and then rumors start to spread.

For now, it seems clear there’s no overarching crypto ban imminent in South Korea.

If anything, regulators there are just trying to get a proactive handle on the domestic crypto ecosystem so that they can bring it into the fold like other kinds of assets.

Korea

It looks like South Korea is trying to keep up with crypto, not be left behind – Image via Cnet

The “scariest” measure they’re taking is trying to get an in-road into knowing which users are using what exchanges and how. In other words, they’re trying to de-anonymize Bitcoin trading just like regulators in the U.K. are doing now, too.

That’s not a ban, of course. That’s just the tax man wanting his cut.

Featured Image via Fotolia

Editors at large. Posting the latest news, reviews and analysis to hit the blockchain.
View all posts by Editorial Team -> Best Crypto Deals ->

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