As mentioned before in some of my other articles/posts that covered the various hacks of South Korean exchanges, the panic in the markets that would follow didn’t necessarily come from the news of the hack itself, but from the threat of the hacks precipitating punitive action by the South Korean government.
If you’re wondering why this hack would have been the ‘straw that broke the camel’s back’, go ahead and check out this link:
At the bottom, I posted a litany of hacks of South Korean exchanges recently (none of them particularly ‘minor’ either).
If you don’t feel like doing that, don’t worry — I’ll just re-post some of my findings there, below:
Series of South Korean Exchange Hackings
This marks yet another time where a South Korean exchange has been hacked.
Just last week, Coinrail was hacked for a total of $40 million.
Not to mention that Bithumb was already hacked before in 2017:
The outed culprit of the last hacking was North Korea per the BBC report.
There have been multiple reports from different media outlets throughout the course of 2018 that have corroborated this assumption as well.
In fact, this is what led to the demise of the South Korean exchange, Youbit:
Then, there was this hack, which (to my knowledge) was the most expensive hack (adjusting for the value lost at the time of the hack), of a crypto exchange, in crypto history (dating back to Bitcoin’s inception).
While the above example refers to a Japanese cryptocurrency exchange, it still exemplifies the fact that N.K. has remained the capital of hacking.
Moral of the Story?
Exchanges in South Korea have been getting their asses kicked and so have traders down there as well.
How have traders suffered down there?
Unfortunately, like this:
Suffice it to the say, the Korean government is thoroughly fed up at this point (as they have been for a while)
So What Will the South Korean Government Do About All of This?
Well, they started with this:
However, this, in my opinion, was a reasonable step for South Korean regulators to take because they do have to look out for money-laundering. I know that that’s a very anti-libertarian statement to make in such a libertarian universe (cryptocurrency) — but it feels like the most logical one when you look at the world from a practical lens.
After that, this came:
Once again, not incredibly unreasonable. I’m guessing that the reason for this was to root out bias. Just recently, there was a push in the U.S. for all public officials to divulge whether or not they possessed cryptocurrency holdings (although it would be super easy for them to hide this by allowing relatives to hold the crypto — like their wife…)
Okay, so nothing wild here.
But What About the Bithumb Hack?
So, that worked out as well.
Won’t There Be a Major Tax on Cryptos Coming From the South Korean Government?
Apparently, this news is false as well.
However, this hasn’t stopped the sheer mass of fear (FUD as some of you LOVE calling it) from proliferating among S.K. denizens and outsiders alike:
What’s the Big Deal About South Korea Anyway?
They represent a sizeable chunk of the cryptocurrency trading economy.
Check out this graphic below:
Don’t fool yourself into thinking that 7.5% is nothing! Remember, this trumps Europe, which is pretty damn subtantial.
It’s worth noting that this data may be a bit outdated, because it was taken about a year ago.
South Korea is worth keeping an eye on! From what I’m seeing though, it appears that the government is not looking to take any drastic measures toward cryptocurrency adoption and usage.
So, perhaps this is just what is known as ‘FUD’