There is no such thing as a cryptocurrency ban coming any time soon, said South Korean FSC (Financial Services Commission).
Yesterday we reported that cryptocurrency might be facing a blanket ban in Korea, after a statement by the country’s Minister of Justice was released.
There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.
FSC Chairman Choi Jong-ku has allayed fears of a cryptocurrency ban, saying that the ministries are currently discussing the extent of trade regulation to be placed on them.
A House Divided
The ministers are divided on the matter with some afraid of putting a damper on virtual currency and fintech in general. Mr. Choi has confirmed that any decision made to limit crypto transactions will have a legal basis.
Douglas Crets, an investor in the blockchain based social media platform ALIS, thinks that regulating the exchanges might be a good idea. He says,
In the long-term chess game of bitcoinization, regulation helps the government ‘process’ what’s happening and it makes it more legitimate for bigger institutional players to put funds into cryptocurrencies.
Korean financial institutions are currently banned from investing in or trading digital currencies. The ban on initial coin offerings (ICOs) is still in place.
According to FSC, six safeguards are being considered for crypto exchanges. This includes:
- Confirming the real name of the user.
- Submitting a proof of income.
- Face-to-face interviews to meet strict Know Your Customer policies.
- Providing cryptographic keys to establish anti-money laundering (AML) systems.
- Separating fiat accounts.
- Supplying sufficient investment warnings.
Regulating the exchanges will help make Bitcoin more mainstream while also filtering out the bad players, said Crets.
After yesterday’s news of an impending ban on cryptocurrency, Bitcoin’s price in South Korea fell by 21% in the country, trading at 18.3 million won ($17,064.53). Note that the currency trades at an average of 30% higher price in Korea when comparing to CoinDesk’s average price.
This large difference in prices has prompted CoinMarketCap (a crypto data resource) to announce that they’re going to exclude prices from some of the Korean exchanges.
This morning we excluded some Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity. We are working on better tools to provide users with the averages that are most relevant to them.
— CoinMarketCap (@CoinMarketCap) January 8, 2018
Prices fell elsewhere as well. At a Luxembourg based crypto exchange, Bitstamp, Bitcoin’s price decreased by 10% getting to $13,199. Earlier, it fell to as low as $13,120 the lowest since January 2nd.