Cryptocurrencies Leg Lower After South Korean Tax Headlines

Update 1100ET: Headlines from South Korea's Yonhap news regarding new tax rules for cryptocurrency exchanges appear to have sparked the latest leg down in cryptocurrencies... As CoinTelegraph reports,

Local news agency Yonhap reports that South Korean government has announced Monday, Jan. 22 that it will be collecting a 22 percent corporate tax and a 2.2 percent local income tax from the country’s cryptocurrency exchanges.

The tax announcement comes right after the conclusion of an unprecedented anti-money laundering probe into six major South Korean banks that showed a 36 times increase in commissions from virtual accounts linked to crypto exchanges, from 61 mln won ($57,340) in 2016 to 2.2 bln won ($2 mln) in 2017.

Yonhap reports that South Korean exchange Bithumb made 317.6 bln won ($295,368,000) last year in total, so is expected to pay about 60 mln won in taxes, according to the tax percentages announced Monday.

The announced tax percentages are in line with the South Korean tax code for all corporations that make a yearly income of over 20 bln won ($18.7 mln).

Cryptos legged lower...

Which is slightly odd since this suggests shutdowns are off the cards - why would government go through the logistics of taxation when it will merely shutter these accounts?

*  *  *

From South Korean bank blocks to Bulgarian ponzi scheme shutdowns and a Bali bitcoin crackdown, you can take your pick as to what is driving the sudden plunge in cryptocurrencies this morning. Ethereum is back below $1000, Bitcoin is back to a $10k handle, and Ripple is down 30% from the weekend's highs.

Weakness began around 6amET but really accelerated at around 8am ET...

With Bitcoin and Ethereum breaking key support levels..

The catalyst for the move is uncertain at best with numerous headlines over the weekend:

  • OneCoin offices were raided and its servers seized in Sofia, Bulgaria, on Jan. 17 and 18, as yet another step in a series of international raids and court cases against the highly-controversial altcoin. Although the servers were shut down, OneCoin currently remains operational.
  • Bitcoin exchanges are under fire in India, as many of the nation’s top banks have suspended or greatly curtailed functionality on exchange accounts. State Bank of India (SBI), Axis Bank, HDFC Bank, ICICI Bank and Yes Bank have all taken strong action toward crypto exchanges, either closing accounts or severely limiting functionality. The banks cite the risk of dubious transactions, according to local reports.
  • The biggest Nordic bank sent a memo to all its employees on Monday informing them that they will not be allowed to trade in Bitcoin and other cryptocurrencies. Nordea Bank AB will impose the ban from Feb. 28, after the board agreed to take a stand due to the “unregulated nature” of the market, spokeswoman Afroditi Kellberg said by phone. The bank had about 31,500 employees at the end of the third quarter.
  • Bitcoin is under heavy surveillance on Bali, an island in the Indonesian archipelago, according to local reports. Central Bank officials are seeking to crack down on the use of the cryptocurrency anywhere in the nation.

But we do note that the most recent plunge occurred as Bitcoin broke below its 100-day moving average at $10951...

As we noted yesterday, the Bitcoin futures short keeps growing...


And with the short overhang growing weekly, one wonders how long before a short squeeze - whether due to some long-overdue bullish catalyst or for some other reason - in unleashed first in bitcoin futures, then quickly cascading into the spot market, potentially unleashing the next move higher in the cryptocurrency space.

Year-to-Date, Ethereum remains the only big winner of the major cryptos...

Finally, as a reminder, this January weakness in Bitcoin is not unusual as it appears a pre-Lunar-New-Year sell-off is prevalent:


shitshitshit Bilderberg Member Mon, 01/22/2018 - 09:15 Permalink

Yes, as said a few days back, we were in an oversold context but there is a lack of greater fools to be parted from their monies, so we bounced a little back up to recharge some indicators only to fall back again lower the next time and lower before we reach the so called new normal/sucker rally. And them expect the trend to amplify with time: it would be severely counter productive to print tethers to stabilize/up the market now given the number of people who want out. 

Twas a hell of a good run, though. 

In other terms: do no longer buy cryptos. Day trade at your own risk. 

Sell sell sell!!!!!


In reply to by Bilderberg Member

FBaggins Gap Admirer Mon, 01/22/2018 - 12:58 Permalink

The actual value of Bitcoin may depend on the outcome of the battle between the monopolistic and corrupt bank cartel controlling the finances of the world (including our governments) and the private and independent blockchain data-based control of various cryptocurrency traders and owners. The New War of Independence is actually against the corrupt centralized control of the bankster cabal and their proposed globalist and centralized One World Government and a One Wold Bank controlling all credit and debt.  


In reply to by Gap Admirer

83_vf_1100_c eforce Mon, 01/22/2018 - 15:21 Permalink

Bullshit. The Titanic/Hindenburg/Bitcoin is going down. HODL that sucker all the way to the bottom ya greedy fucks! if you don't have your Lambo you missed out.

  Any bad news, bc drops. There is no good news.

In reply to by eforce

11b40 shitshitshit Mon, 01/22/2018 - 14:25 Permalink

Anyone trying to make buy/sell desisions on Cryptos based on charts is a total moron.  Nothing about this space is conventional or historic.  Headlines drive the price action.  Let me know when you can chart headlines and forecast movement.

As for greater fools, it remains to be seen who the fools are.  And please don’t bother me about tulip mania.  That just tells me you don’t know anything about that, either.  It was a tavern game, and limited to a small area.  Few actually lost anything.  Research it.

In reply to by shitshitshit

pods MrBoompi Mon, 01/22/2018 - 12:24 Permalink

HSBC will make a rule that says they will not deal in cryptos due to the fact they can be used for illicit things.  Can't have anyone cutting into their dope racket.

What this will do is cause the exchanges to be decentralized.  Which will be a good thing. No more tethers, the unmineable tokens will go by the wayside, and real cryptos will flesh out their real value by their utility.  Invisible hand.


In reply to by MrBoompi

MANvsMACHINE Radioactive Ideas Mon, 01/22/2018 - 09:24 Permalink

All alt coins are priced in satoshis and  are pair traded with Bitcoin so their prices move in lock step with the price of Bitcoin.

A coin worth 100,000 satoshis when BTC is $15,000 will tend to maintain its proportional value to BTC when it drops to $12,000.  So when BTC drops, it drags most coins with it in proportion.

There are a few outliers which indicate stronger or weaker coins and perhaps should be bought or sold accordingly.

In reply to by Radioactive Ideas

TradingTroll Radioactive Ideas Mon, 01/22/2018 - 12:58 Permalink

Lets make some assumptions...


On Dec 27, 10 days after the BTC top, this article came out showing S. Koreans had on average $5300 invested in cryptos:…

S. Korea is the #2 crypto market after Japan and aroudn that time was showing around a $800bn total market cap for cryptos. $800,000,000/$5300 is 150,000,000 or 150 million investors.


If the global population is 7bn and there are say 2bn kids/retirees/rural dwellers who would never trade anything, then we have 150,000,000/5,000,000,000=3%.


Of course, if we make the argument that Japan, the US and Europe have higher average amounts invested and we then increase the average to $10,000, then the participation rate is closer to 1.5%.

In reply to by Radioactive Ideas