Korea FTC Chair: Closing cryptocurency exchanges “unrealistic”
Quick, don't panic.
According to Blockchain News Korea, Kim Sang-jo chairman of the South Korean Fair Trade Commission (FTC) commented during a radio interview that an outright ban on South Korean cryptocurrency exchanges was simply not going to happen.
The chairman's comments put paid to rumours of a South Korean crackdown. The rumours are believed to have been largely responsible for a sudden cryptocurrency market crash last week, which saw about $100 billion quickly wiped off the market.
Last week's cryptocurrency market crash isn't to be confused with this week's market crash, which seems to have instead stemmed from rumours of a China crackdown instead, although uncertainty from South Korea likely still played a part.
The so-called crackdown is instead an investigation into the violation of consumer rights, and accusations that specific South Korean exchanges may have violated consumer law by breaching the electronic commerce terms of service laws set out by the FTC – for example, by preventing customer withdrawals or unfairly representing their services.
The investigation into this issue is still underway. If wrongdoing is found it will most likely be affecting individual South Korean exchanges rather than the market as a whole.
And even if a specific exchange is found to be in violation, this does not necessarily mean it will close.
"There is no applicable legislation [to ban cryptocurrency exchanges]," Kim said. "Any violation of the electronic commerce laws is not enough in itself to legally force the closure of cryptocurrency exchanges."
Closing cryptocurrency exchanges is "an unrealistic possibility" he added, saying that any issues with illegal activities in the cryptocurrency space should be addressed by appropriate regulations rather than an outright ban.
He also said that the amount of money being invested in South Korea is "not stable enough for it to be properly labelled as speculation," and that until regulations are introduced the investor is entirely responsible for their own money and the risk they take. But that doesn't mean exchanges are able to operate outside consumer law.
In short, South Korea's FTC isn't cracking down on cryptocurrency any more than a food safety inspector cracks down on eating.