The cryptocurrency market took a hit after the South Korea Ministry of Justice revealed it plans to continue drafting a cryptocurrency trading ban bill. The market soon started to recover, after the South Korea Ministry of Strategy and Finance came forward and stated that it does not support nor agree with the Ministry of Justice’s ban proposal.
Any draft legislation would require the parliament’s approval, which could take months to happen. Moreover, the timing seems odd at best, with local elections upcoming this year. Cryptocurrencies are popular in South Korea, so much so that a petition opposing the potential ban already gathered nearly 100,000 signatures.
Several South Korean opposition parties, according to local news outlet Hani, took advantage of the trading ban fiasco, by pointing out that instead of cracking down on cryptocurrency exchanges, regulations should be drafted, and that there should be “detailed review and coordination” on the subject.
A spokesperson for an opposition party notably pointed out that a lot of people lost money because of the government’s announcement. The spokesperson said (roughly translated):
“The government announcement should be based on detailed reviews and coordination. If there is a problem, we should warn and prepare in advance, the behavior we showed today was the opposite.”
The spokesperson further added that if there is the possibility of tax evasion through cryptocurrency trading, that possibility should be discussed so as to arrange a “taxation plan as soon as possible,” similarly implying a ban on cryptocurrency exchanges isn’t the right move.
Per the opposition party, the fear, uncertainty and doubt (FUD) spread by the South Korean Ministry of Justice unfairly punished local investors and effectively turned them into “gamblers” in what it deemed a policy of seclusion.
Taking into account that “a lot of people’s property has evaporated,” the spokesperson added that president Moon Jae-in should “apologize to the people and take appropriate measures.” Given the backlash, that saw petitions being filed and opposition parties rally against the move, South Korea’s Ministry of Justice softened its stance on the ban proposal to an extent.
South Korea’s primary financial regulator, the Financial Services Commission (FSC), is unlikely to support a ban, as it has long insisted on introducing regulations that will see cryptocurrency exchanges be granted licenses. In 2016, FSC chairman Yim Jong-yong stated that the government would push for the “systemization of digital currency on a full scale in tandem with a global trend in the U.S., Japan and other countries.”
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