With a surge in cryptocurrencies, the financial sector appears to be under a threat, which has led to its ban in China. South Korea is the next country to consider a law that will place an embargo on cryptocurrency trading.
With the use of cryptocurrencies such as bitcoin, etherium and a host of many others, the government is unable to collect taxes on transactions and the law enforcement agencies are also unable to tackle crime transacted with the said cryptocurrencies. Little wonder why hackers are increasingly demanding for ransoms to be paid in bitcoin.
As the country plans to establish a law against crypto trading, many Seoul cryptocurrency exchanges have been raided in the past few days in an allegation against tax evasion.
The past year witnessed an increased demand for bitcoin, leading to many inexperienced investors rushing to have a taste of the crypto wave. Undoubtedly, this has raised a major concern from the government which is thereby seeking means to bring the trading activities to a halt. The South Korean Justice Minister, Park Sang-Ki said: “there are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges”.
This indicates a crackdown on exchanges like bithumb. Once a bill is approved, all exchanges could be shut down. An unnamed bithumb official told Reuters, “we were asked by the tax officials to disclose paperwork and things yesterday”.
Coincidentally, bitcoin dropped in value by 7% today. However, we cannot attribute this fall to the crackdown on cryptocurrencies in South Korea; it’s probably just a coincidence. The South Korean government already made a revelation in December 2017 that it would intensify its scrutiny on exchanges to put an end to untraceable digital transactions.
Whatever the case, cryptocurrencies may not be leaving anytime soon as more and more currencies continue to gain popularity globally. Currently, there are over a thousand currencies with many subscribers scrambling for as many coins as they can gather with the hope of making huge gains in the nearest future. Nobody wants to be left out in the crypto-wave.