The D-day is finally here and as earlier said, South Korea has finally implemented a ban on anonymous cryptocurrency trading from today onwards. This means that investors who still continue to hold virtual trading accounts or have failed to link their trading accounts with their actual bank accounts will no longer be able to trade cryptocurrencies on South Korean exchanges.
Soon as the new rules were being implemented, bitcoin plunged by a $1000 from $11,925 to $10,926. According to CoinMarketCap, Bitcoin is currently trading at the price of $11,022.25.
The South Korean Financial Services Commission said that the new regulatory measures were intended to “reduce room for cryptocurrency transactions to be exploited for illegal activities, such as crimes, money laundering and tax evasion.” As the new rules were being brought into effect today, everything functioned normally, confirmed a representative from the south Korean cryptocurrency exchange ‘Bithumb’.
However, many participants in the crypto space believe that the regulations introduced by South Korea might create a knee-jerk impact temporarily, however, they would be quite beneficial looking in the long run. Julian Hosp, co-founder and president of cryptocurrency start-up TenX, said: “I think it’s the start of a crackdown on anonymity and the illegal use cases that some cryptocurrencies might have.”
Hosp further added that “If afterward, investors and companies have more legal security working in the ecosystem, it’s going to have some short-term downsides, but long term, it’s going to have a really, really big boost.” However, Hosp believes that the regulations can, however, create a big impact on the market. He says “The crypto space is highly emotional and things are taken from a small thing and extrapolated into something really large. So even if Korea is quite small on a rational scale, it still could have a big impact.”
Also, Simon Taylor – Bitcoin and blockchain expert backs the decisions made by the South Korean government and says that the government is taking right steps for the larger good of its investors. Taylor said: “I think it’s evidence of a government trying to get its hand around a subject which was seen as ungovernable. Historically we thought this thing was decentralized, there was no way to control it but what you have here is centralized exchanges. This is the same as a bank. This is something that holds the bitcoin or the digital currency on your behalf.”
John Sarson, managing partner at Blockchain Momentum said: “Protocols to protect investors have been what the cryptocurrency markets have been missing and it’s what the legislation in South Korea seeks to implement. It’s a good thing anytime an investment exchange knows their client and makes sure that their clients are doing things that are above board legally.”
Owing to a crazy increase in crypto-investing activity in South Korea, the government has been seeking ways on how to control this crypto madness sighting reasons of money laundering and tax evasion. There has been a lot of discussion going on this since the beginning of 2018 and now finally the government has taken this concrete and decisive step. However, it remains to be seen that in the long run, whether this decision turns in the favor of investors or not.