SEOUL (Reuters) – With a tech-savvy population quick to adopt the latest gadgets and a young generation facing dim prospects in the conventional workplace, South Korea has been a fertile ground for virtual currencies.
But the countrys swift embrace of bitcoin and other cryptocurrencies has been met with an equally swift backlash by regulators, who have gone so far as to propose outright bans on trading.
With markets around the world watching, South Korea has become a fault line between a generation that sees cryptocurrencies as a way to a better life, and government officials who have likened the market to gambling and warned that it encourages illicit behavior.
On Thursday the justice minister, Park Sang-ki, sent global bitcoin prices temporarily plummeting and virtual coin markets into turmoil when he said regulators were preparing legislation to halt cryptocurrency trading.
As of Friday, a petition on the website of the presidential Blue House had drawn more than 120,000 signatures opposing the move. Heavy internet traffic briefly crashed the site.
The online uprising against the governments plans puts President Moon Jae-in a tough spot, and his office was quick to say a ban is just one proposal under consideration.
The latest idea to ban it all seems to have come out of a fear that when the bubble bursts and things go wrong, it will be all on the government, said Yun Chang-hyun, an economics professor at University of Seoul.
With the youth unemployment rate three times the national average and a growing income gap between rich and poor, many young Koreans worry about their economic prospects.
Tax it as much as you want but dont shut it down. My life depends on it, one petitioner wrote on the Blue House website.
Lee Min-kyung, a 25-year old student in a Seoul-based graduate school said she earned about 18 million won (16,973.93), double her initial investment in bitcoin. She said the government is showing haphazard responses simply because officials have no idea.
They say the purpose of the regulation is to curb speculative moves, but it makes me just think the government simply doesnt understand what the market is, Lee said.
More than 30 percent of 941 office workers surveyed in December by Saramin, a South Korea-based job portal, said they traded cryptocurrencies. The respondents had an average of 5.7 million won ($5,357.14) invested in virtual currencies, and a majority of them said they began trading because they saw it as the fastest way to earn money.
That trend has earned critics on the street as well as in government offices.
Koh Young-sam, a 56-year old mechanic in Seoul, warned that the craze would collapse.
Young people shouldnt be lured into this kind of scam. There is always something fishy about things that grow this fast, Koh said.
South Korea is not alone in struggling to figure out how to tax and regulate online currencies, many of which are designed to provide anonymity for transactions.
In September last year, China cracked down on cryptocurrency trading, citing what officials saw as broader risks to the countrys economy.
As South Korea accounts for about 15 percent of global bitcoin trading, according to the website Coinhills.com, how regulators approach the issue will likely have international effects.
The local price of bitcoin in South Korea bounced back on Friday to 19.3 million won ($17,481.20) from as low as 17.5 million won ($16,445.82) according to Bithumb, the nations second-largest cryptocurrency exchange. On the Luxembourg-based Bitstamp, bitcoin stood at $13,709 after touching $12,800 the prior day.
Park Chong-hoon, an economist at Standard Chartered Bank in Seoul, said, South Koreans find it hard to deal with the jealousy from watching their neighbours getting rich fast.
It is a sentiment echoed by many. Scepticism of get-rich-quick schemes among South Korean officials has colored past forays by international finance into the country.
In the mid-2000s the U.S. private equity fund Lone Star faced raids of its offices and a years-long legal battle with the South Korean government after the foreign fund made millions of dollars buying and selling a controlling stake in a major South Korean bank.
That controversy, which raised concerns over South Korean money flowing to foreign entities, is probably among several factors making South Korea officials wary of managing the new breed of markets originated abroad, analysts said.
In a practical sense, the South Korean government needs to factor in some political aspects if a growing number of people lose huge sums of money on bitcoin because of the governments failed attempts to rein in the frenzy, people will blame the government, Lee Dong-gwi, a psychology professor at Yonsei University. Simply put, the South Korean government could be afraid of the political hassles of being held accountable.
Additional reporting by Dahee Kim; Writing by Josh Smith; Editing by Gerry Doyle
- Fidelity Said to Offer Cryptocurrency Trading Within a Few ... - May 10th, 2019
- Is This Cryptocurrency The Next Bitcoin? - forbes.com - April 28th, 2019
- Cryptocurrency Definition | Bankrate.com - April 26th, 2019
- Samsung is developing its own blockchain network, report claims - April 26th, 2019
- 2019s best cryptocurrency wallets | 70+ compared | finder.com - April 26th, 2019
- What is cryptocurrency? - Definition from WhatIs.com - April 25th, 2019
- A Beginner's Guide to Cryptocoin Mining: What You Need to ... - April 25th, 2019
- How Cryptocurrency Assets Are Becoming A New Battleground In ... - April 21st, 2019
- What is Cryptocurrency: Cryptocurrency Explained the Easy Way - April 13th, 2019
- How to trade cryptocurrency in the UK - finance.yahoo.com - April 8th, 2019
- Cryptocurrency Trading | TD Ameritrade - April 8th, 2019
- Cryptocurrency Prices, Charts, and Market Cap Data - UNHASHED - April 8th, 2019
- Blow To Bitcoin As World's Largest Cryptocurrency IPO Is Iced - April 2nd, 2019
- How and where do I report Cryptocurrency coin-to-coin ... - March 22nd, 2019
- Hundreds of Millions in Cryptocurrency Vanishes After ... - March 11th, 2019
- Fidelity's new cryptocurrency company is up and running ... - March 9th, 2019
- JPMorgan is creating its own cryptocurrency - CNN - March 6th, 2019
- Cryptocurrency Exchange Says It Can't Access $190 Million ... - February 5th, 2019
- What's the Best Cryptocurrency to Invest in Today? - January 9th, 2019
- Cryptocurrency Trading Easy tips to get started | AvaTrade - January 9th, 2019
- Thailand Issues 4 Cryptocurrency Licenses, Rejects 2 ... - January 9th, 2019
- NASDAQ, Fidelity Invest in New Cryptocurrency Exchange ... - January 9th, 2019
- Cryptocurrency News | Cryptocurrency News | Blockchain ... - January 9th, 2019
- Differences Between Cryptocurrency Coins and Tokens - January 9th, 2019
- Cryptocurrency Charts - January 8th, 2019
- What is cryptocurrency? - cointelegraph.com - January 4th, 2019
- Blockchain Will Survive A Cryptocurrency Apocalypse - January 1st, 2019
- Cryptocurrency - Simple English Wikipedia, the free encyclopedia - December 25th, 2018
- Is Cryptocurrency Dead for Good? | Investopedia - December 6th, 2018
- Cryptocurrency scammers dupe Singaporeans out of $78,000 in ... - December 6th, 2018
- Invest in Cryptocurrency With Spare Change - Black Enterprise - November 28th, 2018
- What is Mining Cryptocurrency? What you need to know... - November 26th, 2018
- Saudi Arabia Will Launch Its Own Cryptocurrency in 2019 ... - November 23rd, 2018
- Bitcoin and Other Cryptocurrency Prices Are Crashing Again ... - November 17th, 2018
- Homepage - Cryptocurrency Army - November 14th, 2018
- Cryptocurrency - Simple English Wikipedia, the free ... - November 14th, 2018
- How To Create Your Own Cryptocurrency - fastcompany.com - November 14th, 2018
- Cryptocurrency price plunge worse than bursting of dotcom ... - September 18th, 2018
- Iran, North Korea and Venezuela turning to cryptocurrency ... - September 12th, 2018
- SEC halts trading in two cryptocurrency products, citing ... - September 12th, 2018
- Cryptocurrency News, ICO Reviews & Blockchain Updates ... - September 9th, 2018
- Cryptocurrency "miners," utilities look for ways to get along ... - August 29th, 2018
- Cryptocurrency: Virtual money, real power, and the fight ... - August 28th, 2018
- Pornhub Now Accepts PumaPay Cryptocurrency - August 27th, 2018
- NK hackers target Mac users with trojan cryptocurrency app ... - August 27th, 2018
- Cryptocurrency: The unlucky investors who got in at the wrong ... - August 26th, 2018
- cryptocurrency coins Archives - The Industry Spread - August 26th, 2018
- cryptocurrency Archives - Page 6 of 6 - The Industry Spread - August 26th, 2018
- Cryptocurrency investment in SMSF - hallandwilcox.com.au - August 26th, 2018
- How To Choose The Best Cryptocurrency Wallet - Crypto News AU - August 26th, 2018
- Courses | Cryptocurrency Australia - August 26th, 2018
- What Every Investor Should Know Before Buying Cryptocurrency ... - August 26th, 2018
- The biggest cryptocurrency hack in the history of blockchain - August 26th, 2018
- After the Bitcoin Boom: Hard Lessons for Cryptocurrency ... - August 21st, 2018
- Cryptocurrency Rankings | CryptoSlate - August 14th, 2018
- Bitcoin price falls after SEC postpones key ETF decision - August 12th, 2018
- Brokers Cryptocurrency Deals Are Focus of SEC Review ... - August 7th, 2018
- 7 Cryptocurrency Predictions for the Rest of 2018 - August 7th, 2018
- Have a Cryptocurrency Company? Bermuda, Malta or Gibraltar ... - July 31st, 2018
- Bitcoin price live: Latest updates as cryptocurrency ... - July 22nd, 2018
- 2018 Bahamas Blockchain & Cryptocurrency Conference - July 16th, 2018
- Best Cryptocurrency Trading Platform 2018 | Top Crypto ... - July 13th, 2018
- Cryptocurrency: Advantages And Disadvantages Explained - July 12th, 2018
- ATB Coin - The fastest and most secure payment system - June 19th, 2018
- An Illustrated Glossary of Cryptocurrency Slang (Infographic) - June 19th, 2018
- Apollo All-in-One Cryptocurrency - June 3rd, 2018
- Cryptocurrency News, ICO Database, Coin Rankings and ... - May 25th, 2018
- CoinLib - Cryptocurrency prices now - May 21st, 2018
- Cryptocurrency Market Capitalizations | CoinMarketCap - May 4th, 2018
- CryptoCurrency Market , Coin Prices & Charts, Crypto ... - April 28th, 2018
- Nasdaq open to cryptocurrency exchange in future, says CEO - April 27th, 2018
- The 4 Top Cryptocurrency Mining Stocks -- The Motley Fool - April 27th, 2018
- One in five financial institutions consider cryptocurrency ... - April 27th, 2018
- New hacks siphon private cryptocurrency keys from ... - April 27th, 2018
- What Is Cryptocurrency? - dummies - April 21st, 2018
- Cryptocurrency Market Surges to $365 Billion, Start of a ... - April 21st, 2018
- BTCMANAGER | Bitcoin, Blockchain & Cryptocurrency News - April 16th, 2018
- How to keep your cryptocurrency safe - CNET - April 11th, 2018
- How do I report Cryptocurrency Mining income? - TurboTax ... - April 4th, 2018
- When do you report Cryptocurrency investments? - TurboTax ... - April 4th, 2018