
South Korea justice ministry prepares to ban cryptocurrency trading - dlau1
https://www.reuters.com/article/us-southkorea-bitcoin-law/south-korea-justice-ministry-prepares-to-ban-cryptocurrency-trading-exchanges-raided-idUSKBN1F00B7
======
sputknick
When I first learned about crypto currency on HN back in 2012 I was excited.
It sounded like a fun technical project that could do good in the world. I
bought some along the way, followed projects. Along the way it changed.
Yesterday I saw a spam post on Reddit about joining a "pump and dump group",
which I had to research. It's groups of people who coordinate a buy of a
specific currency, spread false news about this currency to create a mania,
drive up the price, sell it at a profit. Not only is this probably illegal,
it's immoral. Maybe this is how people who were in the internet in 1992 felt
in 2000?

~~~
omegaham
On the bright side, the idiots who join these groups hoping to scam others
tend to lose their shirts as well. The person orchestrating the pump-and-dump
scheme bought the currency at $X per coin in question long before, and he's
using the people in the group as patsies. "Buy the coins at $X + $Y, and the
rise in price will make it so that you can sell the coins to some other idiot
for $Y + $Z!"

If there aren't enough "outsider" idiots to buy the coins for $Y + $Z before
the correction happens, the "insider" idiots lose their shirts. The original
person, of course, makes a tidy profit.

\---

I learned this the hard way playing Runescape as a 16-year-old. 2007 was an
interesting time for that game.

~~~
aphextron
>I learned this the hard way playing Runescape as a 16-year-old. 2007 was an
interesting time for that game.

Playing that game over the years was the most thorough education in trusting
strangers on the internet anyone could ever need

~~~
zeusk
For me, it was an introduction to basic finance topics like abitrage and
trading; also the enormous scope of scams people can pull.

I made my fortune in high frequency trading of rune sets after they introduced
Grand Exchange and steel smelting prior to it.

~~~
shiado
I was one of those assholes that ran a bot farm to devalue your labour. RS was
a great place to learn about the race to the bottom, economies of scale, and
other random economic topics as well.

~~~
omegaham
The most interesting part of RS was that the more raw the product, the more it
was worth - you could get more XP out of it.

And before the Grand Exchange, buying in bulk cost _more_ than buying small
amounts, because buying large amounts of materials required you to sit on
World 1 spamming "buying iron ore whatever each" for hours.

------
prodtorok
"In an official announcement, South Korean government reaffirms there will be
NO TRADING BAN"

[https://twitter.com/iamjosephyoung/status/951428854085689344](https://twitter.com/iamjosephyoung/status/951428854085689344)

------
kennethologist
Multiple tweets stating this is all FUD. Can someone contradict or corroborate
this claim? Lots of

"I talked to my contact in South Korea who works for a major exchange, don't
fall into the FUD. The ban is ONLY applicable to exchanges that are not
following the previous KYC regulations."

~~~
colemak0
[http://www.kookje.co.kr/news2011/asp/newsbody.asp?code=0200&...](http://www.kookje.co.kr/news2011/asp/newsbody.asp?code=0200&key=20180111.99099005003)

Basically the ministry of Justice announced they are working on banning
exchanges between crypto and fiat currency in Korea, and they ultimately aim
to close down all exchanges.

Few hours later, ministry of Strategy and Finance calls out that the ministry
of Justice is announcing as if their words are final, but not all government
bodies have agreed to that yet.

For reference, ministry of Strategy and Finance is one of the most powerful
government body in Korea (they fund the ministries). After this news
cryptocurrency value is starting to shoot up again in Korea after the crash.

~~~
wsc981
From Reddit (r/cryptocurrency) - a friend messaged me this today:

    
    
       I'm a South Korean citizen. Let me just tell you what 
       just happened. About 4 hours ago, Ministry of Justice
       issued a statement that the SK government is seeking 
       to ban all crypto exchanges. They explicitly stated 
       that this was a decision that was well communicated 
       between various branches of the government. This 
       caused the market to crash, and really caused a media
       firestorm among Koreans. 
    
       And then 2 hours ago, the Ministry of Finance and the 
       Blue House issued a statement that this decision to 
       ban all exchanges wasn't something that was 
       unilaterally agreed upon, and that the statement made 
       by the MoJ was not their stance on this matter. Now 
       here is my speculation on what happened. 
    
       There was a unilateral agreement to shut all exchanges, 
       but as you all would know, this is a very anti-democratic
       and anti-capitalistic thing to do. So they decided to send 
       out a trial balloon. 
    
       When the statement was made it caused an outrage, as 
       there are approximately 2 million crypto investors 
       in SK. National elections are held on April, so to 
       control the damage I think the Blue House changed 
       its mind and decided to throw the MoJ under the bus. 
       A lot of Koreans are speculating that this is what
       happened under the hood, which is very amateurish. I 
       just feel bad for all the guys who cut losses today.

~~~
moltar
Also, some of those politicians could be traders too and mixing the presage
for profit ;)

------
tfha
Crazy how fast the markets moved on this news. The price crashed and bounced
halfway back before I even found the article, and I was actively searching for
the source of the panic.

But, perhaps that's because in the grand scheme, SK is small news and other
traders who got there first knew full well that it'd rebound.

~~~
joelrunyon
I'm not sure SK is that small news in crypto? Don't they make up a huge
percentage of volume?

~~~
makomk
Their volume figures are pumped by some exchanges allowing larger traders to
pay a flat-rate monthly fee rather than a percentage on trades, and are
sometimes so large that it's hard to treat them as credible.

------
legionof7
The exchanges got raided for tax evasion, I think we need to see the bill
first before saying that crypto trading will be banned.

~~~
chrisco255
Banning the exchange of digital assets, in my opinion, is like banning the
internet. It's not feasible in the long run. Would also be a disappointing
move to see coming from a democratic country that has some degree of property
rights.

~~~
yongjik
It's more like banning a specific set of companies from opening legal websites
in Korea. It's entirely doable, and has been done many times (e.g., porn). I
won't comment on its morality: case by case, I guess.

The ban's purpose is not to stop the most determined, persistent crypto-
anarchists from realizing their dream. Its purpose is to scare away your
average retired dads and office workers from pouring their life savings into
BTC, because otherwise the country will have to feed their children when the
bubble pops.

(Unlike crypto-anarchists, most Korean people and the government believe that
it's the country's duty to keep children well fed and educated, even if their
parents are raging idiots. Whether we actually follow through is... debatable,
I guess.)

------
peterjlee
Right after the S.Korean Justice Ministry announced this, the Finance Ministry
is like WTF? we were planning on taxing them. We can tax them if you get rid
of it.

So far this plan doesn't have the full government support so it might not
actually happen.

------
mythrwy
It's a tough task to let the air of a balloon slowly.

On one hand SK probably has to do something because so many people are jumping
on and eventually will likely get burned. On the other, they just removed a
bunch of "money" from the hands of their citizenry by tanking the markets.
Which in and of itself may be world wide good deed as it could dampen
dangerous rampant speculation but it does make less "rich" people.

My guess is the decline continues into spring but picks back up come summer
and into next year (although at a slower rate which isn't a bad thing). BTC
isn't going anywhere any time soon and although the whole thing is overheated
right now I believe more gains are likely in store in coming years. Shaking
the weak hands out stabilizes a market and a stable market is what is missing
at the moment.

------
ilkan
So I'm assuming SK doesn't want their citizens' money 1) exposed to the risk
of a bubble 2) for which SK society will blame them 3) flowing through Chinese
and Russian miners to 4) pad North Korean state finances?

------
Fuxy
This is a money grab isn't it the South Korean goverment sees a lot of money
moving about in crypto currency and they want to 'tax' it because why not?

The entire article sounded like excuses to me for why they need to be
'monitored' and of course if they are monitoring the might as well tax it
right?

Baning it is no going to solve much so it sound more like a threat to me to
make the exchanges more cooperative.

------
thisisit
_Bitcoin sank on Monday after website CoinMarketCap removed prices from South
Korean exchanges, because coins were trading at a premium of about 30 percent
in Asia’s fourth largest economy. That created confusion and triggered a broad
selloff among investors._

So counterparty risks is still something which is misunderstood in the
cryptocurrency space?

With action pending against South Korea exchanges, higher prices were
warranted.

------
MichaelMoser123
Are other states planning to follow the example of Korea? I would have
expected that governments would not take it lightly that some entity is
challenging the states monopoly to control the flow of value by means of
emitting currency.

(sorry, now i am more informed, China is imposing similar bans; also South
Korea wants more synchronisation with Japan and China on these issues:
[https://cryptovest.com/news/south-korea-pushing-deeper-
colla...](https://cryptovest.com/news/south-korea-pushing-deeper-
collaboration-with-japan-china-for-joint-cryptocurrency-regulations/) )

------
nodesocket
This was only a matter of time. Next up, IRS and US crackdown.

~~~
aviv
My prediction is that Coinbase will be raided by FBI/SEC for one reason or
another in 2018. Leading reason IMO is a manufactured or actual link to
terrorism financing they will use as pretext. Never ever keep coins in an
exchange wallet.

~~~
knownothing
Stop spamming this prediction in comments.

------
cryptozeus
Was anyone talking about.com bubble blowing up before it actually did ?
Speculation of crypto bubble blowing up may actually be built into the cost

~~~
adventured
Yes, there was extremely wide discussion in 1999 and 2000 about the dotcom
party being typically somewhere between fraudulent and a giant bubble. The
Buffett side of traditionalists won that argument, by a landslide. In the end,
profits mattered, sales mattered, and something a lot closer to a traditional
valuations model won out.

There was common discussion about junk dotcoms like TheGlobe.com, DrKoop.com,
Geocities and dozens of others, and how they had no actual sustainable
business (and often no plan for when they'd develop one). Scient, Viant,
Razorfish, MarchFirst, and dozens of dotcom service companies were granted
crazy valuations versus existing traditional peers (which is history rhyming
re Ripple vs PayPal/Stripe/Square/Ant/etc).

The high burn rates, the lack of business models to actually make money, some
that went public with practically no plans for how they'd make money at all,
extremely high valuations on the few that were making money, and so on. These
things were all very widely discussed, many skeptics were shouting about it,
it wasn't popular to give them TV talking time (channels/sites like CNBC et al
have a vested interest in pushing exuberence).

------
Giorgi
Yeah, small dent for the crypto. S.K. crypto trading will just move to
shadows. That's it. Missed chance to tax it.

------
fareesh
That is a criminally poor headline

------
arisAlexis
article is not correct and has been refuted officially by the government.

------
archon810
Crypto is crashing badly right now because of this.

~~~
Cookingboy
Actually as of now it's mostly recovered, ETH is back to around $1250 again.

Seems like the whole crypto is a lot more resilient than it used to be, or
maybe I just jinxed it ;)

------
kvee
Seems like the original post might just be fud:
[http://m.ytn.co.kr/news_view.php?s_mcd=0101&key=201801111615...](http://m.ytn.co.kr/news_view.php?s_mcd=0101&key=201801111615246051&pos)

Using Google Translate: "Cheong Wa Dae said the Justice Minister Park Sang-
ki's remarks that the virtual currency exchange will be closed is not
coordinated by the government.

A Cheong Wa Dae official said in a telephone conversation with YTN that Park's
remarks are the position of the Ministry of Justice and that other ministries
have various positions.

In addition, the Ministry of Justice approached from the dimension of
elimination of speculation, but the Financial Services Commission explained
that the Ministry of Science, Technology and MIC is interested in nurturing
core technologies of virtual money to prevent similar reception.

He added that virtual currency-related policies will determine the best time
for policies to be effective while looking at market conditions. "

and edit: this post isn't a month old

~~~
tomaha
The article you cite is a month old.

