South Korea’s finance minister Kim Dong-yeon said on Wednesday that the government has no plans to ban cryptocurrency trading but will focus on tightening regulations in the digital currency space, Reuters reported.
“There is no intention to ban or suppress cryptocurrency [market],” Kim said. “Regulating exchanges is [the government]’s immediate task.”
Kim’s comment came after Korean customs announced earlier on Wednesday that it had detected an illegal foreign exchange trading nearly $600 million worth of cryptocurrencies. The government didn’t release further details on the case.
The finance minister’s news gave peace of mind to investors who have been speculating on Korea’s position on digital currency, which has been a key driver for price trends.
South Korea is one of the largest markets for cryptocurrency trading. The Bitcoin price surge in 2017 attracted amateur investors like college students and housewives into the space. Some reportedly took out expensive loans and second mortgages to fund their investments. The influx of Korean investors is believed to have contributed to Bitcoin’s peaking to nearly $20,000 in early December 2017.
In December, after several rounds of warnings on cryptocurrency’s high risks, the Korean government banned all anonymous accounts on the country’s exchanges and said it was considering an outright ban on all trading activities.
The news immediately caused a price tumble for Bitcoin and other major digital coins, and it sparked speculation as to whether Korea would follow China and completely shut down cryptocurrency trading.
The Chinese government was the first in Asia to take regulatory actions on digital coin trading. Beijing prohibited financial institutions from trading Bitcoin in December 2013 and closed down all cryptocurrency exchanges in September 2017.
Korean and Japan, while having written regulations governing exchanges, have been relatively loose on enforcement. Last week, an unlicensed digital currency exchange in Japan lost $500 million worth of client funds in what could be the largest hacker attack in the history of cryptocurrency. The government ordered an investigation, but has yet to decide on regulatory changes on a national level.