Earlier this month, reports about an alleged ban on cryptocurrencies in South Korea left many people confused. The misunderstanding and misreports in the media were partly to blame for the major decline of Bitcoin and other cryptocurrencies as investors scrambled for clarification on the issue.
The key component of the proposed regulation in South Korea was to “ban any domestic trades that are made by anonymous accounts,” in order to curtail illegal activity that can occur through anonymous trading. Whether the proposed changes meant more stringent rules or an effective end to cryptocurrency trading in South Korea was not immediately certain, leaving many unsure about the future of their currencies.
The government’s Justice Minister clarifies that the “announcement suggests that a shutdown is not likely in the near future.” Instead, the focus of the regulation is for Korean traders to be required to use their real name and identity on accounts, with an undetermined fine for those who do not comply.
Official statements from the Office for Government Policy Coordination confirm that a cryptocurrency ban is not in the works.
Despite these statements, the Korean public has pushed for further clarification and has petitioned against the regulation. With over 200,000 signatures, the petition has reached the required minimum for government response. Petitioners do support the banning of anonymous trading, and even South Korea’s largest cryptocurrency exchange Bithumb is in favor of “the right set of regulations.” However, petitioners fear that unclear regulations could exacerbate already difficult economic situations for traders, and that heavy regulation can ruin “the happy dream” brought about by digital currencies in general.
South Korean government officials are expected to respond to the petition in the next 30 days.