Earlier this week news broke that the authorities in South Korea are investigating one of the main cryptocurrency traders, as allegations have broken out that they are providing a form of online gambling. The news was brought to the forefront after the Gyeonggi Nambu Provincial Police Agency began officially investigating the methods Coinone uses with regards to their margin trading methods.
Why This Is an Issue in South Korea?
Why would it be considered a form of gambling, well to put it plainly the cryptocurrency traders allow individuals to make informed guesses, as to whether or not the price of the pseudo-currency will rise or fall. Furthermore, the people who have made their estimations can now proceed to make bets against the movement of the currency. The national police have firmly stated that this practice is clearly linked to gambling, as individuals make decisions that are more hopeful wishes than solidly backed by evidence, therefore, have to hope that the odds are in their favor in order to be rewarded for their bets.
Coinone has not taken these allegations lying down and have fought back against them. Coinone has proceeded to point out how these methods are nothing new and are used throughout many industries, including the stock exchange when investors quickly buy and sell items. Under stock market conditions this particular form of transactions is known as short-selling.
Yet, the national police did not seem to find this particular explanation very appeasing. Rather the police force argued that cyrptocurrency providers are not in the same category as businesses listed on the stock exchange, therefore, the fluctuations in Bitcoin are far less stable and more prone to human emotions damaging the system than the stock market.
If this hasn’t been made clear enough by now, South Korea has a very tight hold on the citizens ability to take part in gambling and do not celebrate gambling. South Korea does not take kindly to gamblers, regardless of whether they’re from out of the country on vacation or if they’re native speaking and simply looking for a way to blow off some steam.
The Effect These Actions Have Had
In response to the increased tension from the South Korean government over the margin trading’s, Coinone has suspended all transactions regarding margin trading’s for the foreseeable future. Other major cryptocurrency traders within South Korea have proceeded to so the same as well due to increased pressures from the government.
Furthermore, the police also announced on Wednesday earlier this week that they would be launching an investigation into banks within South Korea to ensure that they are doing all they can to halt “money laundering in virtual accounts”.