DIGITAL MONEY | Moves in South Korea to make cryptocurrency trading more transparent

December 15, 2017 - 3:30 PM
A copy of bitcoin standing on PC motherboard is seen in this illustration picture, October 26, 2017. Reuters/Dado Ruvic/File Photo

SEOUL, SOUTH KOREA — A South Korean blockchain association announced on Friday measures to boost transparency in trading of cryptocurrencies, agreed by 14 exchanges in the country including the world’s busiest virtual currency exchange, Bitthumb.

The Korea Blockchain Industry Association said in a statement users would only be allowed to trade virtual currency through one account after their identity has been confirmed via traditional financial institutions like banks.

The statement added virtual currency exchanges with more than 2 billion won ($1.83 million) worth in assets would be allowed to operate. Measures, which are not mandatory, will start being imposed beginning Jan. 1 next year, the country’s only association for virtual currency exchanges said.

“The regulations will ensure the safety of consumers and transparency in trade and are expected to be the strongest and most effective measures (regarding virtual currency exchanges) on a global scale,” said the statement.

Kim Jin-hwa, one of the association’s leaders, said exchanges would especially work towards identifying account users.

Drawn by bitcoin’s explosive surge of more than 15-fold this year, ordinary South Koreans from housewives to college students and office workers have rushed to mobile-app based virtual currency exchanges in hopes of quick profits despite government-issued warnings.

Despite Friday’s announcement, analysts were skeptical the measures would impact bitcoin exchange prices to a great extent.

“Today’s announcement is unlikely to affect the (bitcoin) price as exchanges can always decide not to follow,” said Park Nok-sun, a cryptocurrency analyst at NH Investment & Securities.

“The measures are positive for sure in that they are actually trying to curb recent speculative investments.”

The world’s biggest and best known cryptocurrency, bitcoin BTC=BTSP stood at $16,935 as of 0143 GMT.

South Korea’s cryptocurrency-related shares extended gains after the announcement, with Vidente and Omnitel up 10.3 percent and 3.4 percent respectively near midday.