South Korea Has No Intention To Ban Bitcoin, Finance Minister Confirms

The months-long will-they-won't-they back-and-forth between South Korea's various regulatory bodies and the cryptocurrency market is finally nearing its final moment of clarity.

Today, in one of the more concrete indications that South Korean regulators aren't planning a China-style stampout of the cryptocurrency market, the country's finance minister assured jittery traders that the country is not planning to ban cryptocurrency trading - a possibility that has been raised several times in recent months, sending bitcoin plunging on every occasion.

According to CoinDesk, Kim Dong-yeon said, "there is no intention to ban or suppress cryptocurrency [market]," in response to a question from a lawmaker about the government's plans to regulate the industry.

Bitcoin

Instead of taking the dramatic step of shutting down all local exchanges - like China did - the minister assured his audience that, just as we reported last month, "regulating exchanges is [the government's] immediate task."

Reports that South Korea was considering a cryptocurrency ban hammered the market in December. Officials reportedly believed the market was overheating and required more scrutiny. However, officials quickly backtracked, and South Korea's presidential office clarified on Jan. 11 that a plan to ban trading cryptocurrencies "is one of the measures prepared by the Ministry of Justice, but it's not a measure that has been finalized."

That plan has reportedly now been thrown out.

Instead, yesterday saw the introduction of new rules banning the use of anonymous virtual accounts for trading - from now on, South Koreans will need to use their real names on bank and exchange accounts. Furthermore, authorities said traders who don't comply will face penalties.

South Korea

As the above chart shows, South Korea is one of the world's biggest markets for trading bitcoin and other digital currencies. But as China's crackdown demonstrated, an outright ban in South Korea probably wouldn't have a lasting impact on the market; many of the businesses would simply migrate to more open economies, and domestic traders would take their business to foreign exchanges.

Despite the reassurances, bitcoin and the other large cryptocurrencies were extending this week's weakness Wednesday morning following President Donald Trump's first State of the Union address.

Crypto

Comments

Davidduke2000 Wed, 01/31/2018 - 07:47 Permalink

bitcoin is no different than the rigged stock market or rigged PM market, why they should ban it? people go to the casinos knowing their chances to win big  are almost nil, but I know a man who won 2 weeks in a row $25000 in the slot machines, so there is a chance that some people would make money if bitcoin goes up.

The us government just set up a bitcoin mining operation to pay for the $1.5 trillion in the new and improved infrastructure plan. 

The_merovingian MagicHandPuppet Wed, 01/31/2018 - 08:18 Permalink

A loss of 10 percent necessitates an 11 percent gain to recover. Increase that loss to 25 percent and it takes a 33 percent gain to get back to break-even. A 50 percent loss requires a 100 percent gain to recover and an 80 percent loss necessitates 500 percent in gains to get back to where the investment value started.

So basically, your saying: it's going down, with a lot of volatility.

In reply to by MagicHandPuppet

Miggy Davidduke2000 Wed, 01/31/2018 - 09:17 Permalink

Right so the idea is to look at other factors rather than fundamentals and charts because they don't apply anymore to any market.

 

Markets have evolved. The media has evolved as well and tests are always being made as to the effect news has on markets. These are the fundamentals of today. Bitcoin is nothing more than a derivative of the news if you want to look at it closely. Many merchants accept it because there is a portion of people that still use it as exchange.

 

News events on Bitcoin as a brand move the market much more than other lesser known cryptos. Welcome to the new fundamentals.

 

I am long bitcoin very small and will hold until 2019. Too much money on the sidelines waiting for the correct news events. Too much money in futures and on exchanges to think it is going anywhere. Reading relaxes me anyway.

In reply to by Davidduke2000

NugginFuts Wed, 01/31/2018 - 07:48 Permalink

Duh. Always trying to spread fear. Even when they do attempt to block it, they can't. Don't worry, just sock it away and earn 4.08% on it while everyone else panics. I've been getting daily interest for months now at https://freebitco.in/?r=8631173, one of the few Bitcoin savings accounts out there. 

 

Just waiting for the Lightning Network for the next leg up, folks. BTC to $50k this year. Governments may hate it, but it's too late to stop it. All they need now is a better way to process transactions and the rebound will occur faster than anyone has time to react.

The_merovingian NugginFuts Wed, 01/31/2018 - 08:13 Permalink

I applaud your enthusiasm. As a veteran, I’ve been hearing that Lightning will be out in 6 months for the last 2 years, so excuse my skepticism. From what I’ve seen recently, they’re still 2 years away from making something usable by mainstream. I’ve also seen a fair amount of manias and they usually don’t recover within a year at that scale. But, crypto is here to stay and will transform our lives in a couple of years. The easy money has been made already.

In reply to by NugginFuts

pods The_merovingian Wed, 01/31/2018 - 09:20 Permalink

I'd agree on the easy money.  Last night I was perusing a couple of threads on bitcointalk and it was crazy how people are giddy about putting in $10 bucks and retiring in July.  There are a LOT of weak hands being welcomed in, and that is going to end badly for most of them.  Truly a mania at hand.

My biggest concern, as I am a rather new supporter of the crypto concept, is what zebra has brought up. That exchanges are dealing with fake BTC. Trades confirming in no time, when in reality, BTC trades are quite slow.  So exchanges are merely taking your $$ and letting you play around with their in-house "BTC".  Makes for a bad ending when the music stops and people want USD for their BTC.

Also, there is the tether fraud that is going to absolutely devastate the crypto world.  I do some mining and exchange it at Kraken, which is the only exchange that offers a USD pair for tether. If people try and get out, Kraken is toast.  Whether they can just say "hack" and move on or have to close up shop idk. But not keeping much there until the tether fraud is resolved.

If these two things can be worked out (exchange fraud with fake BTC, and USDT fraud) then crypto can move forward and start to be adopted more. But that won't happen until this mania is dead.  Crypto is a face paced world, so hopefully it works out before too many are burned and never come back.

pods

In reply to by The_merovingian

The_merovingian pods Wed, 01/31/2018 - 10:30 Permalink

To keep it simple, when you buy or sell BTC on an exchange, they are not transmitted over the blockchain. The exchange credits your account with some BTC, no confirmation needed as no BTC is actually moved. It is only when you take your BTC of the exchange that they are transmitted over the blockchain and need confirmation (hence, if you don’t hold the keys, they are technically not yours). Buying and selling is a simple bookkeeping entry for exchanges and most of them keep their BTC wallet in cold storage for security and only leave enough for daily transactions.

I’ve warned about Tether here as early as November:

The_merovingian tmosley Nov 17, 2017 3:15 AM Permalink

This is not news to me, USD Tether has been under scrutiny for months. USDT is not redeemable for USD.https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87https://medium.com/@bitfinexed Stay away from Tether and Bitfinex. This is not going to end well.

 

Think of Tether as a liquidity pool. It allows traders to store their holding in a token anchored to the value of USD. It's a fix for exchanges that don't have access to banking to provide liquidity and save the fees for converting to Fiat. You can't redeem Tether for USD but you can trade it for cryptos who are. The increase in Tether number in circulation could simply be the increased demand for liquidity. There is however suspicion that the owner may have issued a few more Teether than actually in use.

Even if Tether would go down, it would have a limited effect on the whole Crypto world imho.  

In reply to by pods

pods Nature_Boy_Wooooo Wed, 01/31/2018 - 09:32 Permalink

You cannot say that honestly.  You are a crypto guy/gal so you know the fraud that is USDT.

Tell me, how can a company (Tether), which has been pretty much shut out from the banking industry and fired their auditor, be trusted that they have $2.4 BILLION in USD to back their tethers?

You do realize that tethers are used to save BTC when it dumps, correct?  And BTC prices are set on the margin, and not the market cap.  Once tether collapses you will be lucky to see BTC at $5k if there are any exchanges left standing.

Tether is a HUGE risk to the entire crypto ecosystem.  Don't try and play it off as some dumb FUD (can I just say I fucking hate that shit?) thing. Tether is a gigantic fraud that has ties to almost everything crypto.

Tether is NOT like other cryptos. Others may have $50 million in USD tied up and a $500 mil market share. Tether, by design, has a 1:1 backing by USD.  So there is $2.4 BILLION USD's backing tether, if you believe them. I for one do not. 

Tether and Bitfinex are done, and Kraken, which has the only USDT:USD pair, is going to be the exit when the fraud implodes.

Watch the video of the Station nightclub fire to see what is going to happen when Tether collapses.

pods

In reply to by Nature_Boy_Wooooo

pods tmosley Wed, 01/31/2018 - 10:13 Permalink

Yeah, true. I think it was said as "severed ties."

BTW, thanks for bringing the tether thing to light. Took me a couple of days of reading to get my brain around it, and to see what is going on. Eye opening for sure.

I'm sure that tether has ~$2.2 billion USDs in sham accounts somewhere. They have to, right? It's backed 1 to 1.

/s

pods

In reply to by tmosley

Nature_Boy_Wooooo tmosley Wed, 01/31/2018 - 10:35 Permalink

Tether was a way for USD investors looking to invest large amounts without using services tied to US banks. This shit has been going on with offshire gaming and other illegal activities since the beginning of time, you just never knew about it.

 

Tether was a 3rd party processor whose service was to move large amounts of USD for shady characters looking to launder money. They shutdown shop because they drew attention of authorities.

 

If this is anything like the offshore gaming industry there will be dozens of Tethers over the next few years. Some may get shutdown, some people may get locked up but as long as there remains people looking to bypass traditional banks to launder money there will be services like Tether lining up to offer their services.

In reply to by tmosley

Nature_Boy_Wooooo pods Wed, 01/31/2018 - 10:16 Permalink

$2.4 billion is less than 1% of the entire crypto currency market.

 

It is barely 1% of Bitcoins market cap. If we were to assume that Tether were evenly distributed across the crypto market, it will have little to no effect on Bitcoin. Shitcoins with very small market caps on the other hand will likely be the biggest victims of a Tether crash which will lead to a run on the shitcoin bank as everyone rushes to move their shitcoin investment to Bitcoin.

 

 

In reply to by pods

pods Nature_Boy_Wooooo Wed, 01/31/2018 - 10:38 Permalink

You really don't understand market cap do you?

You are equating market cap with the amount of actual fiat that entered that market. The VAST majority of BTC was "purchased" for very little actual dollars/yen/whatever. The margin price raised the price of all.  The fact that it rose so quickly means there wasn't that much fiat entering to raise the price to where it is today.

So a $500 billion "market cap" might only have $2 billion of actual dollars anchoring it.

Tether is different. Tether is ONLY issued dollar for tether. That's it. It's not a crypto, it's a universal currency to purchase cryptos. Big difference.  So a market cap of $2 billion is $2 billion in USD. Or it is supposed to be. 

You can say what you will. Go ahead, IDGAF. But don't pretend you weren't warned about tethers. My guess is you will sit babbling in the corner about market cap when this blows.  Because blow it will, and it will remake the landscape of cryptos for evermore.  This is NOT going to be some simple token blowing up. This is going to affect almost everything, because it is the denominator in most foreign exchanges for US based "investors."  Sure that would balloon the price at first. But the chaos it would add to the market would be unlike ANYTHING that has gone on before.  My guess is that it will take out most Asian exchanges.  If not take them out entirely, at least remake them to something entirely different.

Tether will be a word that is universally despised in the crypto world.  Mark my words.

pods

In reply to by Nature_Boy_Wooooo

RedDwarf pods Wed, 01/31/2018 - 10:57 Permalink

Tether is almost certainly a fraud.  However the other guy is correct, it's only 2.4 billion.  Color me skeptical as well that it is as important as you think it is, margins or no.  The majority of the crypto market is not using tethers or else it would be far larger.

"Others may have $50 million in USD tied up and a $500 mil market share"

That sentence is gibberish.  If you spend fiat to buy crypto, that fiat is not 'tied up' in an escrow account or something.  The person who sold the crypto for the fiat is now free to go spend said fiat.  When you later sell your crypto that you bought for $50 for $500 said fiat is still not tied up.

In reply to by pods

pods RedDwarf Wed, 01/31/2018 - 11:25 Permalink

Sorry, "there may be $50 million in fiat anchoring a $500 million market cap crypto".  Most all the gains in cryptoland over the last year or so have been paper gains. There simply is not that much fiat in cryptoland that can be exchanged for the market caps of cryptos.

He was saying tether would have no effect simply due to the market cap of tether versus BTC, for example.

I argued that they are two different things, because tether cannot appreciate like other cryptos. It is anchored to the dollar (or close to it), so every tether represents 1 dollar. Whereas the $500 billion market cap of BTC is NOT $500 billion in USD, nowhere near that. Since the price is set on margin, and price begets market cap, a smaller amount of USD/fiat controls BTC.

So to say that tether will have no effect since it is only $2.4 billion and BTC is $500 billion is not an accurate way to compare the two.  It would only take $2.4 billion in USD to destroy many multiples of that in BTC market cap.

The fact that tether is used as liquidity between exchanges makes matters worse, as if the curtain is pulled back, and already thin market just got that much thinner. Karen Carpenter thin.

pods

In reply to by RedDwarf

Brazen Heist tmosley Wed, 01/31/2018 - 09:03 Permalink

What if the "tether situation" is just another storm in a teapot?

Let's say Tether does not match every single USDT issued with USD fiat. Then there will be a flood of tethers on the market and people will prefer to liquidate them en masse for cryptos rather than fiat- which will be bullish for cryptos anyway.

In reply to by tmosley

pods Brazen Heist Wed, 01/31/2018 - 09:34 Permalink

How will they do that when the USDT pairs are removed from exchanges?

Tether is a gigantic fraud. A nuke sitting under the ass of cryptos, just waiting to go off.

Storm in a teapot? Bwaaaah.  This is an ELE for cryptos if it really goes off. With the SEC looking into it, bad times ahead.

pods

In reply to by Brazen Heist

Brazen Heist pods Wed, 01/31/2018 - 10:12 Permalink

Probably as much as I think the US Federal Reserve has that much cash to honour all digital cash withdrawals 1-to-1.

Exchanges are a weak point in crypto....but they also have a self-interest not to bring the whole thing down, so whether or not tether caves, I doubt they will push their customers into a corner with no way out, as that would be the end of them too.

In reply to by pods

pods Brazen Heist Wed, 01/31/2018 - 10:22 Permalink

Exchanges are a weak point, and many don't want to see their customers flayed.

But, tether and Bitfinex have gotten too greedy, and they have blown up the crypto world.

Tether should have suspended operations back when they first lost banking connections, they were only upside down less than a million bucks.   But they kept pressing on and got greedy, (allegedly) issuing unbacked tethers to defend BTC.  And now it's too late.  I give it less than a month, maybe a week.  They will trot out the "hack" BS, but in reality, it is just the fact that they issued too many unbacked tethers and it blew up.

The real problem is that most exchanges outside the USA do not have USD pairs. They have USDT pairs, so anyone wanting USDs will be stuck with tethers. This hack will not just take down tether and Bitfinex. It is going to blow up numerous exchanges because tether is not really a crypto, but sort of a digital dollar.  Used to trade out of cryptos for those exchanges that cannot offer USD transactions.

In short, this is bad. REALLY bad.  Once the light goes off in your head as to what will happen when tether blows up, you start to wonder if this in fact is an ELE for the crypto world.

pods

In reply to by Brazen Heist

Brazen Heist tmosley Wed, 01/31/2018 - 10:05 Permalink

I try to avoid exchanges where ever I can.

Tether or no tether, I'll still be trading crypto.

I just don't think that exchanges will back customers into a corner if something like this does happen. And if it does, then atomic swaps and decentralized exchanges are all the better reason to emerge from the mess. But it could just be a big deal about nothing and be mitigated through coordinated exchange action.

I also remember your "flippening" call that never amounted to much. BCash was supposed to be king by now!

In reply to by tmosley

U4 eee aaa Wed, 01/31/2018 - 12:16 Permalink

Ruh Roh!

 

It looks like when he talked it down before so he and his buddies could buy some more he broke something. Now he's trying to talk it back up because he is under water. This should teach government idiots not to open their big mouths for personal gain.

 

No so funny now is it princess?