As of July 2018, the South Korean government officially recognised all cryptocurrency and blockchain-related industries. It was said the government would consider all cryptocurrency exchanges as brokerages. This was a whole new concept from their previous classification of blockchain being a communication vendor.
The move became the foundation for policy-making aimed at promoting blockchain and its regulatory framework. It then continued on to include all blockchain systems, such as decentralised applications (dApps), cryptocurrency exchanges, and transactions.
The growth of South Korean cryptocurrency exchanges has been mechanised by their inflation on home turf. It is said that one in three high-net-worth South Koreans are likely to have invested in crypto. South Korea has also become the largest market for trading Ethereum, which is the second most traded cryptocurrency. Top this with South Korean exchanges being some of the largest in the world by volume, and it is no surprise this country is in the middle of crypto and blockchain news.
In addition to this, the force of the South Korean crypto community is reflected in its market. At times, South Korea has accounted for 10% of Bitcoin trading globally. This news resulted in the country’s traders paying above the global market average for Bitcoin and other cryptocurrencies.
Multiple conferences and events took place throughout 2017 and 2018, with thousands of participants attending. At these events, many announcements were made from crypto and blockchain businesses declaring major cryptocurrency milestones from the city of Seoul.
South Korea may be the fourth largest economy in Asia and 11th largest in the world, but it has still been attracting some negativity around its blockchain businesses. On January 21st 2019, Coin Rivet reported on the story of two South Korean exchange CEOs being jailed with three and two-year sentences after they were caught faking volume. The exchange reported five million transactions, the majority of which were indeed fake, with the intention of inflating volume. Read the full story here:
This story hasn’t been the only one about a falsifying claim. The nation’s largest cryptocurrency exchange, Bithumb, denied reports which claimed that up to 94% of their volume was faked. However, the exchange was likely to not have faked the volume, and instead it was investors who resorted to wash trading to collect on a trading fee rebate.
The future is looking strong for South Korean cryptocurrency, and is set to only get better. In 2018, the government of a South Korean province partnered with Israeli blockchain start-up Orbs to create its very own cryptocurrency. The coin was set to be accepted by merchants across the region, including in some of the largest cities such as Daegu.
Joining other nations such as Malta, Singapore, and several other blockchain havens, South Korea has become one of the most welcoming countries for the cultivation of blockchain. A lot of this has to do with South Korea’s younger population and it’s concerning economic situation. The people aspire to grow and become successful, and feel that investing in crypto will be their “golden ticket”.
In December 2018, the South Korean government agreed to invest $35 million in their 2019 budget to develop blockchain technology. This is in conjunction with the Ministry of Science and ICT, the Ministry of Information and Communication, the Democratic Party of Korea, and others.