How Does South Korea View Crypto Currencies?

Since the introduction of Bitcoin, South Korea has been in the forefront trading it. The country is one of the best-wired societies in the world and enjoys blazing-fast internet speeds. This has played a major role in making South Korea a hotbed of cryptocurrency.

For a long time, South Korea has allowed gambling only under certain specific conditions. This has consequently led to slow growth in the betting sector. However, with the growth of the internet and the introduction of cryptocurrency, gambling has taken a new face in the country. According to, Seoul is increasingly becoming a gambling hub where local and international gambling tourism is embraced. There are already 16 foreign-only owned casinos in the country. The number of the casinos is certainly bound to grow based on how digital currency will behave in the coming days.

South Korea’s share of the crypto market

South Korea has one of the largest Bitcoin markets, only behind Japan and the U.S. It accounts for more than 33% of Ethereum market share. It has the largest exchange market for Ether. Bithumb and Coinone are digital currency exchanges located in the country and which rank among the top 15 globally. Overall, South Korea accounts for at least 20% of global cryptocurrency trading.

The FSC announcement

Since the gambling ban was lifted a few years ago, Netent slots have become popular in the few online casinos in Korea. This can be likened to cryptocurrency which has grown rapidly in the past months. However, for cryptos, there has been negative or rather sobering announcements in the past few months. In September, the Financial Services Commission (FSC) ordered a ban on ICOs. According to the government, “cryptocurrencies are neither money nor currency nor financial products”. In a written statement, the government reiterated its earlier stance that it does not guarantee the proper value of virtual currencies.
On 28th December, after FSC directed that there would be no more ICOs (initial coin offers), Bitcoin price fell sharply to a low of $13,611. According to CoinDesk, which tracks Bitcoin’s price index from four exchanges, the drop represented a fall of 11% on that day. On Friday the 29th, the price fell further to $10,400 even though there was no immediate explanation as to the new decline.

FSC stated that the new ICO rules would take effect in January 2018. The detailed statement said that all exchanges were prohibited from issuing any new trading accounts for cryptos. If an exchange disregards this directive, the government has the power to either stop trading or shut down the exchange altogether. The government further directed that crypto trading will no longer be done anonymously. Users must now use their real names while trading.

The way ahead for crypto market in South Korea

South Korea imitates China’s move to ban ICOs. The only difference is that in China, exchanges were ordered to refund the money collected during the ICOs. There are several reasons why the government of South Korea may be taking the move to reign in cryptocurrencies. In a statement, the government warned that cryptocurrencies could be vulnerable to the damage from investment fraud or hacking attacks on exchanges. According to the Prime Minister Lee Nak-Yeon, these could lead to serious distorted or pathological phenomenon.

As evidence, Youbit, a South Korean exchange filed for bankruptcy earlier December after losing a total of $107 in two instances to hackers. Fingers are pointing to North Korea after increased cases of hacking. The final effect of the South Korean government’s move and future developments in the cryptocurrency market will determine how strong the global market will be in future.

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