On January 18th the chairman of South Korea’s Fair Trade Commission Kim Sang-jo stated during a radio show that shutting down cryptocurrency exchanges is not realistic.
During the interview, chairman Kim went as far as to say that banning cryptocurrency trading is “not realistic at all,” and warned the government about the immense economic impact such a reckless approach towards cryptocurrency regulation would bring.
Currently, the South Korean cryptocurrency exchange market led by Bithumb, Coinone, and Korbit is processing more daily trades than the country’s main stock market KOSDAQ. Banning cryptocurrency exchanges within the local market would lead to a similar impact as shutting down the country’s stock market, and the government would not be able to handle the economic impact of a complete ban.
Chairman Kim emphasized that from the viewpoint of an economist, an outright ban of economic activity is not a solution but rather enforcement of an impractical policy that causes more problems within the local market than it solves. Chairman Kim explained that instead of a ban, which cannot be enforced by existing regulations and laws, the government should provide a better and well-regulated ecosystem for its people.
The Fair Trade Commission Chairman Kim stated:
“[Banning cryptocurrency exchanges] is not realistically possible. Based on the electronic commerce law, the government doesn’t even have the authority to close down cryptocurrency trading platforms.
From the viewpoint of an economist, it is not a fair and transparent decision to outright ban economic activity. Whether it is excessive speculation or not, the gain or the loss is the responsibility of the investor.”
More importantly, Chairman Kim also noted that it is crucial for the government and the cryptocurrency task force established by local authorities to understand that the risk from investing in cryptocurrency is the responsibility of the investor. It is not for the government to decide whether an investment into a particular asset is high risk or is defined as excessive speculation.
Whether an investor loses or gains from a certain investment, the responsibility of the risk of the investment should be handled by the investor, not by the government.
The Fair Trade Commission, which remains as one of the major components of the government’s cryptocurrency task force, requested the government to take a more neutral stance on this issue, and cautiously roll out regulations to foster the cryptocurrency market.
Over 250,000 citizens infuriated by the release of a premature statement by Justice Minister Park Sang-ki have signed a petition sent to the Blue House, the executive office of President Moon Jae-in, to reject the cryptocurrency trading ban proposal.