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South Korea justice ministry prepares to ban cryptocurrency trading

206 points by dlau1 9y ago

legionof7 9y ago
The exchanges got raided for tax evasion, I think we need to see the bill first before saying that crypto trading will be banned.
- chrisco255 9y ago
  Banning the exchange of digital assets, in my opinion, is like banning the internet. It's not feasible in the long run. Would also be a disappointing move to see coming from a democratic country that has some degree of property rights.
  - yongjik 9y ago
    It's more like banning a specific set of companies from opening legal websites in Korea. It's entirely doable, and has been done many times (e.g., porn). I won't comment on its morality: case by case, I guess. The ban's purpose is not to stop the most determined, persistent crypto-anarchists from realizing their dream. Its purpose is to scare away your average retired dads and office workers from pouring their life savings into BTC, because otherwise the country will have to feed their children when the bubble pops. (Unlike crypto-anarchists, most Korean people and the government believe that it's the country's duty to keep children well fed and educated, even if their parents are raging idiots. Whether we actually follow through is... debatable, I guess.)
archon810 9y ago
Crypto is crashing badly right now because of this.
- Cookingboy 9y ago
  Actually as of now it's mostly recovered, ETH is back to around $1250 again. Seems like the whole crypto is a lot more resilient than it used to be, or maybe I just jinxed it ;)
sputknick 9y ago
When I first learned about crypto currency on HN back in 2012 I was excited. It sounded like a fun technical project that could do good in the world. I bought some along the way, followed projects. Along the way it changed. Yesterday I saw a spam post on Reddit about joining a "pump and dump group", which I had to research. It's groups of people who coordinate a buy of a specific currency, spread false news about this currency to create a mania, drive up the price, sell it at a profit. Not only is this probably illegal, it's immoral. Maybe this is how people who were in the internet in 1992 felt in 2000?
- ruytlm 9y ago
  Pump and dump schemes, among others, are a good example of why unregulated does not necessarily mean good.
  - sputknick 9y ago
    Agreed, I think that's my favorite lesson from the crypto experiment. Sure there are people who use regulation as a gatekeeping function, or as a way to magnify their power, but regulations really do exist for the good of the people.
    - 2muchcoffeeman 9y ago
      It’s a bit like finding a piece of code that does something crazy. If you ask around, there could be a really good reason for it. I don’t think we’re going to have a usable crypto currency until economists get involved, or we simply relearn all the lessons we’ve learnt to date.
      - VMG 9y ago
        Yes, crypto is not complete until there are synthetic CDOs!
        sanxiyn 9y ago
        Now we at least have futures market, which is a progress.
tfha 9y ago
Crazy how fast the markets moved on this news. The price crashed and bounced halfway back before I even found the article, and I was actively searching for the source of the panic. But, perhaps that's because in the grand scheme, SK is small news and other traders who got there first knew full well that it'd rebound.
- joelrunyon 9y ago
  I'm not sure SK is that small news in crypto? Don't they make up a huge percentage of volume?
  - proofofanalysis 9y ago
    China made up a much larger portion of the volume, and the market rebounded and even soared after their ban(s).
  - makomk 9y ago
    Their volume figures are pumped by some exchanges allowing larger traders to pay a flat-rate monthly fee rather than a percentage on trades, and are sometimes so large that it's hard to treat them as credible.
- mkirklions 9y ago
  My crypto group chat let me know there was going to be Ripple news today. Bought under 2$, already at $2.25. This is the bull run market I hate, but I'm also well connected...
thisisit 9y ago
Bitcoin sank on Monday after website CoinMarketCap removed prices from South Korean exchanges, because coins were trading at a premium of about 30 percent in Asia’s fourth largest economy. That created confusion and triggered a broad selloff among investors. So counterparty risks is still something which is misunderstood in the cryptocurrency space? With action pending against South Korea exchanges, higher prices were warranted.
nodesocket 9y ago
This was only a matter of time. Next up, IRS and US crackdown.
- aviv 9y ago
  My prediction is that Coinbase will be raided by FBI/SEC for one reason or another in 2018. Leading reason IMO is a manufactured or actual link to terrorism financing they will use as pretext. Never ever keep coins in an exchange wallet.
  - knownothing 9y ago
    Stop spamming this prediction in comments.
    - aviv 9y ago
      Username checks out.
- deleted 9y ago
  [deleted]
kvee 9y ago
Seems like the original post might just be fud: http://m.ytn.co.kr/news_view.php?s_mcd=0101&key=201801111615246051&pos http://m.ytn.co.kr/news_view.php?s_mcd=0101&key=201801111615... Using Google Translate: "Cheong Wa Dae said the Justice Minister Park Sang-ki's remarks that the virtual currency exchange will be closed is not coordinated by the government. A Cheong Wa Dae official said in a telephone conversation with YTN that Park's remarks are the position of the Ministry of Justice and that other ministries have various positions. In addition, the Ministry of Justice approached from the dimension of elimination of speculation, but the Financial Services Commission explained that the Ministry of Science, Technology and MIC is interested in nurturing core technologies of virtual money to prevent similar reception. He added that virtual currency-related policies will determine the best time for policies to be effective while looking at market conditions. " and edit: this post isn't a month old
- tomaha 9y ago
  The article you cite is a month old.
  - deleted 9y ago
    [deleted]
- deleted 9y ago
  [deleted]
cryptozeus 9y ago
Was anyone talking about.com bubble blowing up before it actually did ? Speculation of crypto bubble blowing up may actually be built into the cost
- Hydraulix989 9y ago
  Then it's not speculation anymore if it's already priced that way -- either the bubble burst or it didn't.
- Kiro 9y ago
  Not really. Literally everyone, from HN to my grandmother, says that the crypto market is a bubble while most people were completely clueless right until the dotcom bubble burst.
- quietbritishjim 9y ago
  Not sure why the other reply says there wasn't... I definitely remember speculation that .com shares were a bubble, even in the mainstream (UK) media. Admittedly, the speculation that crypto currencies are a bubble does seem even stronger, but personally I don't find that surprising: it did seem feasible that .com companies could coexist, whereas crypto currencies seem to be offering the same product.
- amarkov 9y ago
  Approximately every cryptocurrency buyer hopes for massive gains in the short to medium term. I don't think I've seen a single article saying "This ICO is going to generate consistent 9% returns, that's better than an index fund!" Because of that, I don't think the possibility of the bubble popping can be built into the cost in the way you're implying. If you think there's a 20% chance your investment will dectuple and a 80% chance you'll be wiped out, you can split the difference to find your expected value. But since none of the market participants believe the current value is the long-term value, eventually it has to land one way or the other.
- adventured 9y ago
  Yes, there was extremely wide discussion in 1999 and 2000 about the dotcom party being typically somewhere between fraudulent and a giant bubble. The Buffett side of traditionalists won that argument, by a landslide. In the end, profits mattered, sales mattered, and something a lot closer to a traditional valuations model won out. There was common discussion about junk dotcoms like TheGlobe.com, DrKoop.com, Geocities and dozens of others, and how they had no actual sustainable business (and often no plan for when they'd develop one). Scient, Viant, Razorfish, MarchFirst, and dozens of dotcom service companies were granted crazy valuations versus existing traditional peers (which is history rhyming re Ripple vs PayPal/Stripe/Square/Ant/etc). The high burn rates, the lack of business models to actually make money, some that went public with practically no plans for how they'd make money at all, extremely high valuations on the few that were making money, and so on. These things were all very widely discussed, many skeptics were shouting about it, it wasn't popular to give them TV talking time (channels/sites like CNBC et al have a vested interest in pushing exuberence).
mythrwy 9y ago
It's a tough task to let the air of a balloon slowly. On one hand SK probably has to do something because so many people are jumping on and eventually will likely get burned. On the other, they just removed a bunch of "money" from the hands of their citizenry by tanking the markets. Which in and of itself may be world wide good deed as it could dampen dangerous rampant speculation but it does make less "rich" people. My guess is the decline continues into spring but picks back up come summer and into next year (although at a slower rate which isn't a bad thing). BTC isn't going anywhere any time soon and although the whole thing is overheated right now I believe more gains are likely in store in coming years. Shaking the weak hands out stabilizes a market and a stable market is what is missing at the moment.
kennethologist 9y ago
Multiple tweets stating this is all FUD. Can someone contradict or corroborate this claim? Lots of "I talked to my contact in South Korea who works for a major exchange, don't fall into the FUD. The ban is ONLY applicable to exchanges that are not following the previous KYC regulations."
- kimjongman 9y ago
  The news is not true. Gov raided only coinone
- dovdovdov 9y ago
  When you were talking did you hear a constant smashing sound of a sell button or screams in the background? Anyways, people who invested in a single bitcoin yesterday only lost $1000 overnight.
- flyGuyOnTheSly 9y ago
  "Justice minister Park Sang-ki said the government is preparing a bill to ban trading of the virtual currency on domestic exchanges." That's what Reuters is saying right now. That should trump any tweets you are reading about this being FUD or a market manipulation by the mystical bearwhale. Reuters is fairly accurate and unbiased imho.
  - kijin 9y ago
    They're preparing a bill. Doens't mean their bill will pass. The ruling party is currently a minority in the national assembly.
- mtgx 9y ago
  Fake news mainstream media strikes again: https://www.reddit.com/r/CryptoCurrency/comments/7plk7q/dont_fall_for_the_fake_cnbc_south_korean_ban/ https://www.reddit.com/r/CryptoCurrency/comments/7plk7q/dont... Maybe Google/FB ought to ban CNBC?
  - dovdovdov 9y ago
kimjongman 9y ago
I'm in Korea right now. The news is not true. Gov is working to legalize crypto
peterjlee 9y ago
Right after the S.Korean Justice Ministry announced this, the Finance Ministry is like WTF? we were planning on taxing them. We can tax them if you get rid of it. So far this plan doesn't have the full government support so it might not actually happen.
Fuxy 9y ago
This is a money grab isn't it the South Korean goverment sees a lot of money moving about in crypto currency and they want to 'tax' it because why not? The entire article sounded like excuses to me for why they need to be 'monitored' and of course if they are monitoring the might as well tax it right? Baning it is no going to solve much so it sound more like a threat to me to make the exchanges more cooperative.
fareesh 9y ago
That is a criminally poor headline
Giorgi 9y ago
Yeah, small dent for the crypto. S.K. crypto trading will just move to shadows. That's it. Missed chance to tax it.
rogerx4578 9y ago
Now btc will hit 7k and then jump to 35k. :-)
MichaelMoser123 9y ago
Are other states planning to follow the example of Korea? I would have expected that governments would not take it lightly that some entity is challenging the states monopoly to control the flow of value by means of emitting currency. (sorry, now i am more informed, China is imposing similar bans; also South Korea wants more synchronisation with Japan and China on these issues: https://cryptovest.com/news/south-korea-pushing-deeper-collaboration-with-japan-china-for-joint-cryptocurrency-regulations/ https://cryptovest.com/news/south-korea-pushing-deeper-colla... )
prodtorok 9y ago
"In an official announcement, South Korean government reaffirms there will be NO TRADING BAN" https://twitter.com/iamjosephyoung/status/951428854085689344 https://twitter.com/iamjosephyoung/status/951428854085689344
- sodafountan 9y ago
  but you won't find this at the top of HN because vast majority of HN hates crypto-currency, most likely because it was once cool now it's more mainstream so it's not cool anymore. What a shame.
  - DiNovi 9y ago
    I think most people hate crypto markets, not the underlying tokens or technology
  - mkirklions 9y ago
    Newbie here, I am not getting that feeling. I think people hate the Alt-coins pump and dump schemes. With the exception of Ethereum and Monero, the rest are entirely speculation IMO. I hope crypto solves a problem, but there will be a lot of people losing money because they got caught up in the $$
    - sodafountan 9y ago
      I don't get that vibe at all, you look at the comments on some of these crypto-currency posts and I get a general vibe of pessimism at its best, outright hatred at its worst.
  - root_axis 9y ago
    The real shame is that you decided to litter the comments with passive-aggressive complaining about how the community regards a particular technology. The most insulting part is your glib dismissal of the critics as shallow-thinking trend followers rather than actually engage the body of legitimate criticism in an intellectually honest manner. Comments like the one you've posted here are a key factor in the negative reaction to blockchain posts on this site (and in general).
ilkan 9y ago
So I'm assuming SK doesn't want their citizens' money 1) exposed to the risk of a bubble 2) for which SK society will blame them 3) flowing through Chinese and Russian miners to 4) pad North Korean state finances?
arisAlexis 9y ago
article is not correct and has been refuted officially by the government.

206 points by dlau1 9y ago

The exchanges got raided for tax evasion, I think we need to see the bill first before saying that crypto trading will be banned.

chrisco255 9y ago
Banning the exchange of digital assets, in my opinion, is like banning the internet. It's not feasible in the long run. Would also be a disappointing move to see coming from a democratic country that has some degree of property rights.
- yongjik 9y ago
  It's more like banning a specific set of companies from opening legal websites in Korea. It's entirely doable, and has been done many times (e.g., porn). I won't comment on its morality: case by case, I guess. The ban's purpose is not to stop the most determined, persistent crypto-anarchists from realizing their dream. Its purpose is to scare away your average retired dads and office workers from pouring their life savings into BTC, because otherwise the country will have to feed their children when the bubble pops. (Unlike crypto-anarchists, most Korean people and the government believe that it's the country's duty to keep children well fed and educated, even if their parents are raging idiots. Whether we actually follow through is... debatable, I guess.)

archon810 9y ago

Crypto is crashing badly right now because of this.

Cookingboy 9y ago
Actually as of now it's mostly recovered, ETH is back to around $1250 again. Seems like the whole crypto is a lot more resilient than it used to be, or maybe I just jinxed it ;)

sputknick 9y ago

When I first learned about crypto currency on HN back in 2012 I was excited. It sounded like a fun technical project that could do good in the world. I bought some along the way, followed projects. Along the way it changed. Yesterday I saw a spam post on Reddit about joining a "pump and dump group", which I had to research. It's groups of people who coordinate a buy of a specific currency, spread false news about this currency to create a mania, drive up the price, sell it at a profit. Not only is this probably illegal, it's immoral. Maybe this is how people who were in the internet in 1992 felt in 2000?

ruytlm 9y ago
Pump and dump schemes, among others, are a good example of why unregulated does not necessarily mean good.
- sputknick 9y ago
  Agreed, I think that's my favorite lesson from the crypto experiment. Sure there are people who use regulation as a gatekeeping function, or as a way to magnify their power, but regulations really do exist for the good of the people.
  - 2muchcoffeeman 9y ago
    It’s a bit like finding a piece of code that does something crazy. If you ask around, there could be a really good reason for it. I don’t think we’re going to have a usable crypto currency until economists get involved, or we simply relearn all the lessons we’ve learnt to date.
    - VMG 9y ago
      Yes, crypto is not complete until there are synthetic CDOs!
      - sanxiyn 9y ago
        Now we at least have futures market, which is a progress.

tfha 9y ago

Crazy how fast the markets moved on this news. The price crashed and bounced halfway back before I even found the article, and I was actively searching for the source of the panic. But, perhaps that's because in the grand scheme, SK is small news and other traders who got there first knew full well that it'd rebound.

joelrunyon 9y ago
I'm not sure SK is that small news in crypto? Don't they make up a huge percentage of volume?
- proofofanalysis 9y ago
  China made up a much larger portion of the volume, and the market rebounded and even soared after their ban(s).
- makomk 9y ago
  Their volume figures are pumped by some exchanges allowing larger traders to pay a flat-rate monthly fee rather than a percentage on trades, and are sometimes so large that it's hard to treat them as credible.
mkirklions 9y ago
My crypto group chat let me know there was going to be Ripple news today. Bought under 2$, already at $2.25. This is the bull run market I hate, but I'm also well connected...

thisisit 9y ago

Bitcoin sank on Monday after website CoinMarketCap removed prices from South Korean exchanges, because coins were trading at a premium of about 30 percent in Asia’s fourth largest economy. That created confusion and triggered a broad selloff among investors. So counterparty risks is still something which is misunderstood in the cryptocurrency space? With action pending against South Korea exchanges, higher prices were warranted.

nodesocket 9y ago

This was only a matter of time. Next up, IRS and US crackdown.

aviv 9y ago
My prediction is that Coinbase will be raided by FBI/SEC for one reason or another in 2018. Leading reason IMO is a manufactured or actual link to terrorism financing they will use as pretext. Never ever keep coins in an exchange wallet.
- knownothing 9y ago
  Stop spamming this prediction in comments.
  - aviv 9y ago
    Username checks out.
deleted 9y ago
[deleted]

kvee 9y ago

Seems like the original post might just be fud: http://m.ytn.co.kr/news_view.php?s_mcd=0101&key=201801111615246051&pos http://m.ytn.co.kr/news_view.php?s_mcd=0101&key=201801111615... Using Google Translate: "Cheong Wa Dae said the Justice Minister Park Sang-ki's remarks that the virtual currency exchange will be closed is not coordinated by the government. A Cheong Wa Dae official said in a telephone conversation with YTN that Park's remarks are the position of the Ministry of Justice and that other ministries have various positions. In addition, the Ministry of Justice approached from the dimension of elimination of speculation, but the Financial Services Commission explained that the Ministry of Science, Technology and MIC is interested in nurturing core technologies of virtual money to prevent similar reception. He added that virtual currency-related policies will determine the best time for policies to be effective while looking at market conditions. " and edit: this post isn't a month old

tomaha 9y ago
The article you cite is a month old.
- deleted 9y ago
  [deleted]
deleted 9y ago
[deleted]

cryptozeus 9y ago

Was anyone talking about.com bubble blowing up before it actually did ? Speculation of crypto bubble blowing up may actually be built into the cost

Hydraulix989 9y ago
Then it's not speculation anymore if it's already priced that way -- either the bubble burst or it didn't.
Kiro 9y ago
Not really. Literally everyone, from HN to my grandmother, says that the crypto market is a bubble while most people were completely clueless right until the dotcom bubble burst.
quietbritishjim 9y ago
Not sure why the other reply says there wasn't... I definitely remember speculation that .com shares were a bubble, even in the mainstream (UK) media. Admittedly, the speculation that crypto currencies are a bubble does seem even stronger, but personally I don't find that surprising: it did seem feasible that .com companies could coexist, whereas crypto currencies seem to be offering the same product.
amarkov 9y ago
Approximately every cryptocurrency buyer hopes for massive gains in the short to medium term. I don't think I've seen a single article saying "This ICO is going to generate consistent 9% returns, that's better than an index fund!" Because of that, I don't think the possibility of the bubble popping can be built into the cost in the way you're implying. If you think there's a 20% chance your investment will dectuple and a 80% chance you'll be wiped out, you can split the difference to find your expected value. But since none of the market participants believe the current value is the long-term value, eventually it has to land one way or the other.
adventured 9y ago
Yes, there was extremely wide discussion in 1999 and 2000 about the dotcom party being typically somewhere between fraudulent and a giant bubble. The Buffett side of traditionalists won that argument, by a landslide. In the end, profits mattered, sales mattered, and something a lot closer to a traditional valuations model won out. There was common discussion about junk dotcoms like TheGlobe.com, DrKoop.com, Geocities and dozens of others, and how they had no actual sustainable business (and often no plan for when they'd develop one). Scient, Viant, Razorfish, MarchFirst, and dozens of dotcom service companies were granted crazy valuations versus existing traditional peers (which is history rhyming re Ripple vs PayPal/Stripe/Square/Ant/etc). The high burn rates, the lack of business models to actually make money, some that went public with practically no plans for how they'd make money at all, extremely high valuations on the few that were making money, and so on. These things were all very widely discussed, many skeptics were shouting about it, it wasn't popular to give them TV talking time (channels/sites like CNBC et al have a vested interest in pushing exuberence).

mythrwy 9y ago

It's a tough task to let the air of a balloon slowly. On one hand SK probably has to do something because so many people are jumping on and eventually will likely get burned. On the other, they just removed a bunch of "money" from the hands of their citizenry by tanking the markets. Which in and of itself may be world wide good deed as it could dampen dangerous rampant speculation but it does make less "rich" people. My guess is the decline continues into spring but picks back up come summer and into next year (although at a slower rate which isn't a bad thing). BTC isn't going anywhere any time soon and although the whole thing is overheated right now I believe more gains are likely in store in coming years. Shaking the weak hands out stabilizes a market and a stable market is what is missing at the moment.

kennethologist 9y ago

Multiple tweets stating this is all FUD. Can someone contradict or corroborate this claim? Lots of "I talked to my contact in South Korea who works for a major exchange, don't fall into the FUD. The ban is ONLY applicable to exchanges that are not following the previous KYC regulations."

kimjongman 9y ago
The news is not true. Gov raided only coinone
dovdovdov 9y ago
When you were talking did you hear a constant smashing sound of a sell button or screams in the background? Anyways, people who invested in a single bitcoin yesterday only lost $1000 overnight.
flyGuyOnTheSly 9y ago
"Justice minister Park Sang-ki said the government is preparing a bill to ban trading of the virtual currency on domestic exchanges." That's what Reuters is saying right now. That should trump any tweets you are reading about this being FUD or a market manipulation by the mystical bearwhale. Reuters is fairly accurate and unbiased imho.
- kijin 9y ago
  They're preparing a bill. Doens't mean their bill will pass. The ruling party is currently a minority in the national assembly.
mtgx 9y ago
Fake news mainstream media strikes again: https://www.reddit.com/r/CryptoCurrency/comments/7plk7q/dont_fall_for_the_fake_cnbc_south_korean_ban/ https://www.reddit.com/r/CryptoCurrency/comments/7plk7q/dont... Maybe Google/FB ought to ban CNBC?
- dovdovdov 9y ago

kimjongman 9y ago

I'm in Korea right now. The news is not true. Gov is working to legalize crypto

peterjlee 9y ago

Right after the S.Korean Justice Ministry announced this, the Finance Ministry is like WTF? we were planning on taxing them. We can tax them if you get rid of it. So far this plan doesn't have the full government support so it might not actually happen.

Fuxy 9y ago

This is a money grab isn't it the South Korean goverment sees a lot of money moving about in crypto currency and they want to 'tax' it because why not? The entire article sounded like excuses to me for why they need to be 'monitored' and of course if they are monitoring the might as well tax it right? Baning it is no going to solve much so it sound more like a threat to me to make the exchanges more cooperative.

fareesh 9y ago

That is a criminally poor headline

Giorgi 9y ago

Yeah, small dent for the crypto. S.K. crypto trading will just move to shadows. That's it. Missed chance to tax it.

rogerx4578 9y ago

Now btc will hit 7k and then jump to 35k. :-)

MichaelMoser123 9y ago

Are other states planning to follow the example of Korea? I would have expected that governments would not take it lightly that some entity is challenging the states monopoly to control the flow of value by means of emitting currency. (sorry, now i am more informed, China is imposing similar bans; also South Korea wants more synchronisation with Japan and China on these issues: https://cryptovest.com/news/south-korea-pushing-deeper-collaboration-with-japan-china-for-joint-cryptocurrency-regulations/ https://cryptovest.com/news/south-korea-pushing-deeper-colla... )

prodtorok 9y ago

"In an official announcement, South Korean government reaffirms there will be NO TRADING BAN" https://twitter.com/iamjosephyoung/status/951428854085689344 https://twitter.com/iamjosephyoung/status/951428854085689344

sodafountan 9y ago
but you won't find this at the top of HN because vast majority of HN hates crypto-currency, most likely because it was once cool now it's more mainstream so it's not cool anymore. What a shame.
- DiNovi 9y ago
  I think most people hate crypto markets, not the underlying tokens or technology
- mkirklions 9y ago
  Newbie here, I am not getting that feeling. I think people hate the Alt-coins pump and dump schemes. With the exception of Ethereum and Monero, the rest are entirely speculation IMO. I hope crypto solves a problem, but there will be a lot of people losing money because they got caught up in the $$
  - sodafountan 9y ago
    I don't get that vibe at all, you look at the comments on some of these crypto-currency posts and I get a general vibe of pessimism at its best, outright hatred at its worst.
- root_axis 9y ago
  The real shame is that you decided to litter the comments with passive-aggressive complaining about how the community regards a particular technology. The most insulting part is your glib dismissal of the critics as shallow-thinking trend followers rather than actually engage the body of legitimate criticism in an intellectually honest manner. Comments like the one you've posted here are a key factor in the negative reaction to blockchain posts on this site (and in general).

ilkan 9y ago

So I'm assuming SK doesn't want their citizens' money 1) exposed to the risk of a bubble 2) for which SK society will blame them 3) flowing through Chinese and Russian miners to 4) pad North Korean state finances?

arisAlexis 9y ago

article is not correct and has been refuted officially by the government.