South Korea’s Evolving Cryptocurrency Journey

South Korea is yet another Asian country — alongside China and Japan — whose government has been actively involved in cryptocurrencies this month. We look at what some of these key focus areas have entailed.

Banning ICOs

Following on the heels of their Chinese counterparts, South Korea’s Financial Services Commission (FSC) has moved to ban ICOs, citing that the fundraising method is to be controlled and monitored in lieu of being accepted into the financial markets. The agency added that “stern penalties” would be imposed on those who continue to issue tokens. In response to the news, Bitcoin dropped by 3.5% and Ether 5.7% but recovered shortly thereafter.

Ether, the platform through which the majority of ICO tokens are issued, is especially vulnerable to such announcements. The country is the world’s second largest Ethereum trader. The largest Ethereum meetup in history was held in Seoul in September 2017, where Ethereum’s founder Vitalik was a speaker.

Fighting off hackers

The platform, alongside Bitcoin, has recently come under scrutiny in the country when it became evident that North Korean hackers are targeting employee emails at South Korean cryptocurrency exchanges. The security research firm FireEye reports that hackers are using spear phishing tactics in an attempt to compromise user accounts and steal private keys stored on these exchanges. There is speculation that North Korea is attempting to circumvent UN sanctions via cryptocurrency, and are targeting exchanges in South Korea as their entryway.

Regulating cryptocurrency

South Korea has so far been one of the more progressive nations when it comes to cryptocurrency. Earlier in the year, the government legalized international Bitcoin transfers and provided a regulatory framework for Bitcoin exchanges and trading platforms. A bill was also introduced to counteract tax evasion through digital currencies.

Surpassing China’s trading volumes

On September 21, the country surpassed China in terms of Bitcoin trading volume, as traders move out of China due to the restrictions imposed. Clearly, cryptocurrency enjoys enough of a popularity for the Party to step in and regulate the switch, while leaving the floodgates open wide enough to keep the stream flowing steadily.