South Korea Has Tightened Regulations on Bitcoin, and the Country May Ban It Entirely
While South Korea is currently in the midst of a bitcoin boom, the Korean government has stepped in. Today, the government just added new regulations. There are even rumors there may be a South Korea bitcoin ban coming.
When the news of increased regulations came out, bitcoin’s worth plunged over 10%, and has fluctuated throughout the day. As the markets closed, bitcoin ended the day worth $13,728.86; down from the day’s high of $15,470.44.
In a statement today, the South Korean government outlined its restrictions. The biggest news is that South Korea will now require real-name cryptocurrency transactions. They’ve also banned banks from offering virtual accounts which the government claims violate the country’s anti-money laundering “Know Your Customer” rules. Despite one of bitcoin’s primary advantages being that transactions can be anonymous — leading to its reputation as the de facto currency of the Dark Web — many bitcoin exchanges in the U.S. have also implemented similar procedures.
Bitcoin is very popular in South Korea. South Korea accounts for around 20% of bitcoin transactions in the world. Bitcoin is so popular, South Korean exchanges can charge a 30% premium over international rates for the crypto-currency. Though South Korea bitcoin is popular, it’s not without its troubles — a little over a week ago, the South Korean exchange Youbit announced it would close after it had been hacked, losing 17% of their assets.
South Korea isn’t the only Asian government skeptical of bitcoin. Singapore warned bitcoin buyers they could lose everything. Stephen Innes, head of trading for Asia Pacific at Oanada, told Bloomberg:
Regulators are getting so concerned that this is primarily and predominantly a retail phenomenon. Regulators not only in Asia but globally are going to start addressing this fact because I don’t think they’ve actually come to terms with what the absolute downside of a complete drop in crypto means for the economy.
Though it is feared that South Korea may soon ban bitcoin, so far China is the only country to completely ban the cryptocurrency. However, China has country-wide internet censorship, which made the move easier than it would be otherwise.
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