Cryptocurrency is a big deal in South Korea, they are a major force in the market. For this and other reasons South Korea has enacted some sensible regulations on crypto trading.
NOTE: “Sensible” is a subjective term, but what I mean is that they passed some light regulations that might actually help the market, as opposed to something like a full ban. That said, see an the updates for how this is playing out.
This then is not so different from China banning ICOs, cracking down on telegram groups, and creating a few more rules for its exchanges, and it isn’t so different from the U.S. defining how the capital gains tax works back in 2014.
Its an expected and reasonable occurrence given cryptocurrency’s meteoric rise (which is partly fueled by the crypto craze in South Korea, one of the top markets for crypto along with the U.S. and Japan).
Despite that, any sort of bad news is liable to drop crypto prices, and this event did that temporarily (which is why we are reporting on it late; that is, to avoid being part of the FUD).
Still, the mini-panic was unwarranted, as these regulations are likely to make the crypto stronger if anything.
After-all, most recent regulation simply bans anonymous cryptocurrency trading and provides some oversight on exchanges.
This is a good thing for everyone except 1. market manipulators, 2. those who just happen to be in a coin that is being manipulated and are nimble enough to take profits before the manipulators dump the coin, and 3. people who generally have something to hide (I don’t want to focus on this one, but this is I’m sure part of the logic).
So, worst case is we see coins moon 950% instead of 1,100% (as we will have lost some anon pumpers)… that isn’t every worst case, in fact it might even be sort of fine.
In crypto prices get inflated two ways, one way is due to a bunch of excited people from around the globe bidding up coins (a natural process of markets), another way is that people gather on telegram groups and use anonymous accounts to pump the price of a coin so they can “dump” them for a quick profit.
Gains made quick and dirty, like from a pump and dump, don’t necessarily help the market long term (they are part of what causing instability).
That is just one example of why a little more transparency and oversight could actually help exchanges and crypto.
Some would prefer that governments stay out of cryptocurrency. However, since that is an unreasonable expectation in reality, a second best case is that governments regulate lightly and focus on the worst behaviors in crypto only.
The traditional stock exchange has some basic regulations and oversight, yes that holds back a few epic runs here and there, but in return it offers stability.
Epic runs are good for a lucky few, general stability and otherwise great gains across the board is generally better for the many.
A few manipulators, some potentially with something to hide and bad intentions, winning big at the expense of the masses isn’t “exciting new tech craze” or “global currency that solves world hunger” it is sort of just “the worst practices of any era back in a digital form; some new players, same exact game.” Its not necessarily the ideal that many getting into crypto are striving for, and it likely won’t help crypto remain a force long term.
Anyways, justifications aside, no one asked our opinion, regulation is happening, let’s just be happy this is “oversight” and not “a total ban of crypto”… that was a possible world you know.
When a government regulates something, it legitimizes it. When you are told the right way to trade crypto and pay taxes on it, important part of the message is “here is the government’s rules for how to treat crypto when you trade it legally.” That is good by many measures.