Blockchain Names Battered After South Korea Cracks Down On "Irrationally Overheated" Bitcoin

Overnight saw South Korean financial regulators announce a series of crackdowns on what they described as "irrationally overheated" cryptocurrencies that slammed Bitcoin and the rest notably lower. Since then prices have stabilized but blockchain-based companies such as RIOT, LFIN, and LTEA are all tumbling this morning.

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Bloomberg News reported that South Korea will require cryptocurrency transactions to name participants and ban banks from offering virtual accounts.

The government may also direct law enforcement officials to close some exchanges.

“Cryptocurrency speculation has been irrationally overheated in Korea,” the South Korean government said in a statement reported by Bloomberg.

 

“The government can’t leave the abnormal situation of speculation any longer.”

This smacked Cryptos lower but they have since stabilized...

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However, blockchain-related stocks including On Track Innovations, Riot Blockchain, Digital Power, Overstock.com, Pareteum, LongFin fall pre-market...

In the pre-market: OTIV -3.2%, RIOT -8.8%, DPW -5.6%, OSTK -3%, TEUM -10%, LFIN -5.4%, SSC -3%

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South Korea is an important market for cryptocurrency trading. 

Mati Greenspan, an analyst with trading platform eToro, said in an email this month: "Recent estimates state that 21% of all global BTC volume are done in Korean Won."

This is not the first attempt at a crackdown on cryptocurrencies by South Korea.

Earlier in December, South Korean officials reportedly banned local finance firms from handling bitcoin futures.

South Korea has taken a tough stance on digital currencies, banning initial coin offerings (ICOs) earlier this year.

Comments

SamAdams AlaricBalth Thu, 12/28/2017 - 08:54 Permalink

Hey ZH, just so you know, pink sheets are not real stocks.  They are pump and dump, reverse split scams.  Most all of the companies you keep publicizing had an entirely different name and focus not more than a few months ago.  Seriously, do not give any free advertising to these crooks by seemingly legitimizing their existence.

That is all.... Sam out....

In reply to by AlaricBalth

SamAdams AlaricBalth Thu, 12/28/2017 - 08:54 Permalink

Hey ZH, just so you know, pink sheets are not real stocks.  They are pump and dump, reverse split scams.  Most all of the companies you keep publicizing had an entirely different name and focus not more than a few months ago.  Seriously, do not give any free advertising to these crooks by seemingly legitimizing their existence.

That is all.... Sam out....

In reply to by AlaricBalth

SamAdams AlaricBalth Thu, 12/28/2017 - 08:55 Permalink

Hey ZH, just so you know, pink sheets are not real stocks.  They are pump and dump, reverse split scams.  Most all of the companies you keep publicizing had an entirely different name and focus not more than a few months ago.  Seriously, do not give any free advertising to these crooks by seemingly legitimizing their existence.

That is all.... Sam out....

In reply to by AlaricBalth

Yellow_Snow Thu, 12/28/2017 - 08:14 Permalink

"[ INSERT ANY YEAR ] marked a time of unprecedented growth for the digital currency. As the price of a bitcoin increased over 6000 percent... more developers, entrepreneurs, and investors flocked to the virtual currency market than ever before. However, Bitcoin is not a household name or widely used service. The majority of Americans don’t even know what Bitcoin is. Additionally, its reputation for facilitating illicit activities, price volatility, and security questions are all issues the Bitcoin community must explain before it can go mainstream. But those invested in the technology, ...believe this is a disruptive technology"

Yellow_Snow HillaryOdor Thu, 12/28/2017 - 08:36 Permalink

HOW MANY PEOPLE OWN AT LEAST ONE BITCOIN ?

Let's do the math...

16,000,000 current supply

 - 6,400,000 BTC in top 1000 whales

 - 2,000,000 BTC LOST

= 7,600,000 BTC AVAILIBLE

THEREFORE CURRENTLY ONLY 7.6M COULD OWN AT LEAST 1 BTC

If it were equally dispersed 1 person in 1,000 (actual number is much less)

--> WHICH DISPROVES THE FACT EVERYONE AND THEIR BROTHER OWNS BITCOIN...

In reply to by HillaryOdor

macdavy Thu, 12/28/2017 - 08:14 Permalink

when you fuck people over for the better part of a decade destroy their savings, they do irrational things, like buy tulips or in this case math. 

Stackers Thu, 12/28/2017 - 08:15 Permalink

I did not read that article and S.Korean government as anything other than good news for the Crypto world. All they said is that they are going to start regulating and forcing exchanges to operate under existing AML laws. This is good news for the Crypto world. It shakes out the under capitalized and shady "Mt. Gox" exchanges of the world and pushes people to use more legit exchanges like Coinbase and Gemini, which should attract a broader base of persons and stabilize the market overall.

Laowei Gweilo Stackers Thu, 12/28/2017 - 08:40 Permalink

I think it's less about just the news today, but more a combination with the bank ban and new speculation tax and new reserve requirements last time, so combined with today, it shows a momentum somewhat similar to China's escalation that began as similar regulation.

That said, China was always pessimistic on BTC whereas Korea has often been as reassuringly positive as JP, just cautious.

In reply to by Stackers

Dumpster Diva Thu, 12/28/2017 - 08:22 Permalink

When it rains...it pours....

 

11/29/2017

The Court has issued a ruling in the battle between the Internal Revenue Service (IRS) and Coinbase, a company which facilitates transactions of digital currencies like Bitcoin and Ethereum, to determine whether the IRS is entitled to customer data. Today, the Court granted in part and denied in part the federal government's petition to enforce the hotly contested summons: in other words, the IRS may legally investigate Coinbase account holders who may not have paid federal taxes on their virtual currency profits, but the scope of the summons has been dramatically narrowed.

The case began in November of 2016 with a request filed on behalf of the IRS to serve a "John Doe" summons on all U.S. Coinbase customers who transferred Bitcoin, a convertible virtual currency, from 2013 to 2015. A "John Doe" summons is an order that does not specifically identify the person but rather identifies a person or ascertainable group or class by their activities. The IRS argued that the "John Doe" summons was necessary because they had found evidence of noncompliance and underreporting among Coinbase customers - the agency just couldn't identify the exact identities and scale of the problem without more information. The IRS was initially seeking all records, including third party information, related to Bitcoin transactions conducted by U.S. Coinbase customers over the 2013 to 2015 time period.

The initial request was granted and in response, Coinbase customer and attorney Jeffrey K. Berns, the Managing Partner of Berns Weiss LLP, filed a motion to intervene and have the ruling set aside. The IRS responded with a motion asking the court to deny Berns the right to intervene. Eventually, Berns withdrew his motion and in March of 2017, the IRS filed a new action seeking to enforce the summons on Coinbase. Coinbase also argued against the summons as did several "John Does."

 

 

In its defense of the subpoena, the IRS argued that:

There has been an explosion of billions of dollars of wealth in just a few years from bitcoin, a significant amount of which has no doubt accrued to United States taxpayers, with virtually no third-party reporting to the IRS of that increase in income.

(You can read more on taxation of cryptocurrencies like Bitcoin here.)

The IRS also scoffed at the argument that "Bitcoin and blockchain are high regulated technologies," comparing it to "barter exchanges in the 'Wild West' days of the late 1970s and early 1980s, before Congress imposed reporting requirements on these barter exchanges." Further, the IRS argued that some users of cryptocurrency "have openly acknowledged they consider using bitcoin in order to avoid tax reporting requirements."

Even as they argued that such a broad request was necessary, the IRS agreed to narrow the scope of the summons. The IRS also agreed not to seek records for users for which Coinbase filed forms 1099-K during the time period in question or for users whose identity is known to the IRS.

After the scope was narrowed, the IRS argued that Coinbase admitted that the targeted information still involved 8.9 million Coinbase transactions and 14,355 Coinbase account holders. However, according to the tax agency, "only 800 to 900 taxpayers reported gains related to bitcoin in each of the relevant years and that more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin in a given year." That suggested "that many Coinbase users may not be reporting their bitcoin gains." The IRS, the court found, "has a legitimate interest in investigating these taxpayers."

Yellow_Snow Thu, 12/28/2017 - 08:31 Permalink

HOW MANY PEOPLE OWN AT LEAST ONE BITCOIN ?

Let's do the math...

16,000,000 current supply

 - 6,400,000 BTC in top 1000 whales

 - 2,000,000 BTC LOST

= 7,600,000 BTC AVAILIBLE

THEREFORE CURRENTLY ONLY 7.6M COULD OWN AT LEAST 1 BTC

If it were equally dispersed 1 person in 1,000 (actual number is much less)

--> WHICH DISPROVES THE FACT EVERYONE AND THEIR BROTHER OWNS BITCOIN...

Banjopicker Thu, 12/28/2017 - 08:34 Permalink

"Irrationally overheated" in Korean translates to "Irrationally undertaxed".  Just like Coinbase.  Governments will get their taxes from the average user and the advanced users will find some way to decentralize their trading off exchange...

1936ryer Thu, 12/28/2017 - 08:36 Permalink

The cat is out of the bag -- go ahead and ban cryptos, but when the next financial crash happens and all of your real tulip bubbles burst in stocks and bonds and real estate -- the masses will no longer believe Central Bank or Government lies.  Our rulers our losing all creditablility and are being shown for what they are - self serving corrupt pigs.  U can't kill crypto, world has already changed, the dinosaurs either just don't know it yet, or are too afraid to admit what they know is true. This is why they are running scared at something that is less then half of one percent of all the assest classes put together.  Really, scared of bitcoin and cryptos with a 550 billion dollar market cap -- WTF the ECB is printing 200 billion a month to buy bonds, not to mention what the BOJ has printed.