This week, several Western mainstream media outlets have falsely reported that South Korean cryptocurrency exchanges were “raided” by local police and authorities.
More inaccurate reports regarding the current state of the South Korean cryptocurrency exchange market led the entire cryptocurrency market to decline in value, demonstrating a similar effect to that of the various “China Bans Bitcoin” stories that have made headlines over the past few years.
As local media outlets including JTBC and SBS have reported, South Korean cryptocurrency exchanges were not raided by police but were visited by financial authorities for unannounced interviews. The visits were a part of the government’s investigation into the cryptocurrency market and its cryptocurrency regulation task force’s initiative to further regulate the market.
A raid implies a sudden attack or a crackdown on an organization or a group of people. South Korean cryptocurrencies were compliant in the investigations and visits by the authorities from the cryptocurrency regulation task force formed by the South Korean Ministry of Strategy and Finance, Financial Services Commission, Ministry of Justice, Fair Trade Commission, and Financial Supervisory Commission.
Currently, the South Korean government is concerned in regards to the growing speculation in the cryptocurrency market and the rapidly increasing trading volumes of local exchanges. To bring the speculation under control, South Korean financial authorities agreed upon imposing stricter regulations.
On January 11th, South Korea Justice Minister Park Sang-ki, released a statement during a press conference, explaining that the government is drafting a bill to ban cryptocurrency trading. Immediately after the statement was released, the Ministry of Strategy and Finance officially announced that it does not support or agree with the proposal of Minister Park to ban cryptocurrency trading.
The South Korean government, through the Blue House, the executive office of President Moon Jae-in, also announced that the statement of Minister Park does not reflect the stance of the government, which is to regulate and foster the South Korean market to minimize risks and protect investors.
Minister Park was heavily criticized by the opposition party and officials within the Ministry of Strategy and Finance for releasing a premature statement that led the cryptocurrency market to fall. Officials of the opposition party accused Minister Park of manipulating the cryptocurrency exchange market and nearly 100,000 South Korean citizens requested the Blue House for the removal of Minister Park from office.
JTBC: South Korean gov't "shocked" at the number of citizens requesting the removal of Justice Minister and Finance Minister for market manipulation.
100k signatures filed to reject #cryptocurrency trading ban proposal.
30k signatures filed for removal of the two ministers. pic.twitter.com/1HokXj8Wkb
— Joseph Young (@iamjosephyoung) January 12, 2018
In the upcoming weeks, South Korean cryptocurrency exchanges are expected to collaborate closely with the government to come up with practical regulations for the local cryptocurrency market.