In 2017, virtual cryptocurrency, led by Bitcoin, set off a global boom and South Korea became one of the most active and largest virtual currency markets in the world.
Even as authorities have repeatedly warned investors, bitcoin and other virtual currency speculative frenzy is very dangerous, but South Korea is still addicted to this.In addition, the South Korean market has also attracted the attention of investors around the world.
As of January 11, the won was the second most common currency used to trade major cryptocurrencies after the U.S. dollar, accounting for more than 10% of Bitcoin transactions for the rest of the second half of 2017. In the second-largest On the digital trading platform Ethereum, the Won was also the No. 1 trading currency, and by the end of 2017, regulators' attitude towards cryptocurrencies started to get tougher.
In September 2017, the South Korean Financial Services Committee (FSC) announced a total ban on the issuance of ICO financing. In early December 2017, South Korean Prime Minister Lee Nak-yeon said in a statement: "If the laissez- Can lead to serious social distortions and pathologies. '
While virtual currency transactions are rising at an alarming rate, authorities are taking steps to prevent money laundering and other illicit activities By January 30, the country banned deposits in bank-anonymous virtual accounts and asked lenders to report suspicious traders, including Deposit or withdraw 10 million won (US $ 930) or more of suspicious traders daily from cryptocurrencies. Regulatory policies also prohibit minors, foreigners and financial institutions from trading domestically. The Bank of Korea even has to ask its employees not to trade Encrypt money, especially during business hours.
However, on January 15, nearly 200,000 South Korean citizens signed a petition on the official website of the presidential palace to oppose the ban on virtual currency transactions, and investors worried about the difficulty of purchasing the virtual currency exchange closed down. On January 11, the South Korean Attorney General reiterated Bitcoin dropped 12% after he banned proposals for virtual currency trading.
From the data results, South Korea's frenzy of virtual currency did cool down after the vigorous regulation.
According to the rankings of Coinhills, the transaction volume of won denominated bitcoins in South Korea currently stands at 4.84% of the market as of February 7. Although the carnival continues, compared with more than 10% of global trading volume in 2017 , And the traditional currency only after the dollar trading, the market has cooled a lot.
At the beginning of January 2018, the price of bitcoin in South Korea was over 40% higher than the price quoted by the U.S. exchange in the same period, which was still as high as 20% on 19 January.
And February 7, according to CoinMarketCap data, South Korea bitcoin quotes have returned to the average, the premium completely disappeared.
According to Lee-ki Lee, a senior fellow at the Korea Institute of Finance, individual investors in South Korea have long favored high-risk financial investments, while Ha Tae, a professor of economics at Southwestern University of Suwon, -hyeong) believes that South Koreans are tempted by speculative trading because South Korea lacks other high-yielding investment projects and people are looking for any investment that will result in higher returns.
Kwak Keumjoo, a professor of psychology at Seoul National University, believes that bitcoin's statelessness attracts some citizens.
In fact, in addition to the high-risk, high-return and statelessness of virtual currency, Korea's virtual cryptocurrency market started early and contributed to South Korea's position in the global market.
In South Korea, not only are many bitcoin exchanges such as Coinplug, Korbit, Xcoin, Coinone and Coinpia, with transaction fees approaching or equal to zero. Korea's offline retail expansion in the virtual money market has long since begun. As early as 2015, South Korea Bitcoin exchange Coinplug plans to release okBitcards, a pre-paid Bitcoin physical card, to about 24,000 convenience stores in Korea at a time when 8,000 convenience stores, led by brands 7-11, have joined in. More than 7,000 ATM machines to buy credit cards to buy bitcoin prepaid cards.According to the British "Guardian" 2014 report, South Korea ranked first in the world ATM machine.
In addition to its commercial activities, South Korea also has one of the most active bitcoin communities in Asia. Currently, 2092 members of Seoul Bitcoin, the most famous bitcoin party in Korea, have been established through the offline activities of organizations that started the development of bitcoin Newcomers know bitcoin, but also for senior players to provide a platform for exchange.
However, the headache for each country's regulators is that the entire market is hard to regulate for flexible virtual currency transactions, and for those fanatics and speculators, even if regulators push for trade bans, there are always underground Trading and off-site platforms for traders to continue buying cryptocurrencies, they will try to use these ways to convert money into bitcoin, and then start offshore transactions.
The development of the Korean virtual currency and the recent regulatory achievements may provide some ideas for other countries. However, it is still a question that governments need to step up thinking about the inaccessible part of regulation.