Thursday, January 11, 2018

Cryptocurrencies across the board get whacked as South Korea raids exchanges and prepares legislation to ban crypto trading

There has been alot of confusion in the Pacific Rim over the past two days regarding potential legislation to both ban the trading of cryptocurrencies, and the mining of them.  And in particular the catalyst for this chaos is coming from one of the biggest trading depots in the world, that of South Korea.

In many different surveys and reports over the past year, an estimated 70% of all Bitcoin trading takes place in the three Asian countries of Japan, China, and South Korea.  And of course according to blockchain data, 1% of Bitcoin wallet owners control 99% of the total amount of currently mined Bitcoin.

But all of a sudden the atmosphere within Asian governments is shifting, and reports out on both Jan. 10 and 11 show that not only have there been raids on cryptocurrency exchanges under the guise of fighting tax evasion, but South Korea in particular is mulling legislation to possibly ban cryptocurrency trading outright.

Update: Reuters is now piggybacking on the previous report from Bloomberg, with the news that South Korea’s justice ministry said on Thursday it was preparing a bill to ban cryptocurrency trading through its exchanges. 
"There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” said Park Sang-ki at a press conference, according to the ministry’s press office. 
He added that he cannot disclose details about the proposed shutdown of virtual currency exchanges but will jointly work with the government task force. 
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While the earlier report  from Bloomberg that South Korea is preparing a Crypto-exchange shutdown bill has yet to be confirmed, moments ago Reuters reported that in the latest crackdown against thr frothy sector, South Korea’s largest cryptocurrency exchanges, including Bithumb and Coinone, were raided by police and tax agencies this week for alleged tax evasion. 
An official at Coinone, one of the country's largest crypto exchanges, told Reuters that "a few officials from the National Tax Service raided our office this week." He added that "local police also have been investigating our company since last year, they think what we do is gambling,” said the official, who spoke on condition of anonymity. He said Coinone was cooperating with the investigation. 
On Wednesday tax authorities also raided, Bithumb, the second largest virtual currency operator in South Korea. 
"We were asked by the tax officials to disclose paperwork and things yesterday," an official at Bithumb said, requesting anonymity due to the sensitivity of the issue. 
To be sure, this is not the first time the South Korean government has cracked down on potential money-laundering and tax evasion. Authorities previously said they are inspecting six local banks that offer virtual currency accounts to institutions, amid concerns the increasing use of such assets could lead to a surge in crime. 
The crackdown on Seoul-based operators of some of the world’s busiest virtual currency exchanges comes as the government attempts to calm frenzied demand for cryptocurrency trading in Asia’s fourth largest economy. - Zerohedge


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