Fingers are crossed as one of the world’s cryptocurrency trading giants decides its house rules.
Yesterday, South Korean government officials held an emergency meeting to discuss cryptocurrencies as trading becomes ubiquitous to its citizens. Officials worry that without intervention, the “speculative mania” can fester into “some serious pathological phenomenon.”
With students and workers alike compulsively checking exchange values and trading impulsively, buying tokens has become an easily accessible form of gambling for South Koreans, who themselves are not allowed to gamble in casinos in the country, except in Kangwon Land. Yet visiting foreigners are free to gamble away in several casinos in major cities.
South Korean news website Hankyoreh released a supposed leak of the regulations the government is looking to enforce. Translated by Cryptocoins News, the following rules are said to be part of the regulatory framework.
1. Prevent unaccredited investors from dealing with losses through highly volatile cryptocurrencies.
2. Prevent strictly regulated cryptocurrency exchanges from operating as speculative platforms for unaccredited investors.
3. Request banks and exchanges to ensure underaged investors and foreigners cannot open trading accounts on cryptocurrency exchanges.
4. Temporarily suspend institutional investors and retail investors from investing in cryptocurrencies.
There is no mention of any decision regarding taxation on capital gains from cryptocurrency trading, but the coast is not yet clear for holders. A report by Reuters stated that the government will require exchanges to “uphold investor protection rules and disclose all bid and offer quotes.” It’s hard to imagine how investors can be protected in a market as volatile as the cryptocurrency trade without service providers assuming a great deal of risk.
The Korean won holds a huge percentage of the global BTC trade. Despite only accounting for 1.9% of the world economy, the Korean won at one point was involved in 21% of BTC trades, according to Fortune. Naturally, the whole world is watching for their government’s verdict, which will effectively influence global cryptocurrency trades—the BTC trading value has been seen dropping recently amid these discussions.
The South Korean government is set to officially announce regulations tomorrow.