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South Korean Officials Bash ICO:s and Plan to Approach Bitcoin 'Cautiously'

South Korean Officials Bash ICO:s and Plan to Approach Bitcoin 'Cautiously'

On June 18, government officials from South Korea revealed some opinions concerning cryptocurrency ‘speculation’ taking place in the region.

Also read: Korea Steadily Becoming a Cryptocurrency and Fintech Hub 

Speculation and Unreasonable Profits

South Korean financial regulators and government agencies have been watching and researching the use of digital currencies within the country. According to the publication, Business Korea, law enforcement officials such as the prosecutor’s office and the National Intelligence Service (NIS) are watching these markets closely.

South Korean Officials Plan to Approach Bitcoin 'Cautiously'

Lately, both bitcoin and ethereum have been selling like hot cakes in Korea and for prices above the global average for both cryptocurrencies. For instance at the time of writing the global average for BTC is roughly $2684 but on the Korean exchange Korbit, one bitcoin is selling for over $3000. Government officials from the region believe the rising prices are based on mere speculation and are currently not considering digital currencies an investment. Moreover, authorities spoke harshly against ICO’s that have recently been gathering millions of dollars. 

“The recent rise in cryptocurrency prices has taken on a speculation aspect.” explains a South Korean official.

It is a clear speculation. In particular, it is difficult to evaluate the value of an initial coin offering (ICO), which issues a new coin, so it can make unreasonable profits.

No Consensus Across Governments on Directions

South Korean Officials Bash ICO:s and Plan to Approach Bitcoin 'Cautiously'Furthermore, the country’s prosecutors have said there have been reports of a lot of fraudulent activities surrounding digital currencies. Some law enforcement officials want the state’s regulators to intervene the regional publication’s reporter Cho Jin-young detailed. Following the request, the Korean government has created a “task force” that includes members from the Bank of Korea, the Financial Supervisory Service (FSS), and the Financial Services Commission (FSC). Sources say the working group is pondering regulating cryptocurrencies but cannot come to an agreement on the best path forward.

“Currently, every country has different points of view on virtual currencies, and there is no consensus across governments on directions,” details an FSC executive.

There is also a lack of systems that can be referred. So, we should approach the matter cautiously. Accordingly, it is still unclear when the Bitcoin exchange registration systems that the market expects can be introduced.

Additionally, the report describes concerns for manipulated volumes from domestic exchanges. South Korea’s top exchanges in the region Bithumb, Coinone, and Korbit have been trading large volumes of Korean Won-KRW/BTC daily. Volume-wise the top three bitcoin trading platforms in South Korea are surpassing many of the top exchanges worldwide.

What do you think about the South Korean government viewing cryptocurrencies as mere speculation? Let us know in the comments below.

Images courtesy of Shutterstock, and Wiki Commons.

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Tags in this story
Bank of Korea, Bitcoin, Bithumb, Coinone, Ethereum, FSC, FSS, ICOs, Korbit, Korean Won, KRW/BTC, N-Featured, South Korea
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Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.