On January 23rd, South Korea’s Financial Services Commission confirmed in a statement that all Bitcoin investors and traders would need to do future business dealings though real-name bank accounts in order to “reduce room for cryptocurrency transactions to be exploited for illegal activities, such as crimes, money laundering and tax evasion.”
Right after the news hit the market, the price of Bitcoin fell below $11,000 and Ethereum fell to $1,174. While many analysts and experts believe that while South Korea may be seemingly attacking Bitcoin, the real-name bank accounts system will give more security to investors and to the market. The country has been trying to tame the heat recently and the South Korean government now believe this is the way to do it.
It’s almost ironic that Bitcoin is now suffering so much considering that in Asia, Japanese company Yamada Denki just allowed their Shinjuku store to start accepting Bitcoin payments, and South Korean e-commerce giant WeMakePrice just integrated Bitcoin into their payment systems, as well, reported Papermag.
The new rules will enable the Know-Your-Customer (KYC) process and banks will apply it to Bitcoin’s investors.
CNBC commented:
“A representative of South Korean cryptocurrency exchange Bithumb, which began the real-name cryptocurrency identification service this morning local time, said operations had “gone smoothly” on Tuesday. “Nothing has changed in terms of coin transaction,” he added.”
While the market of South Korea may represent only a part of the Bitcoin and cryptocurrency market, these new regulations can affect the overall prices of digital currencies and the rationale and emotions of investors. Many are now spooked by the constant regulatory tries of big banks, governments and the like to curb the what seems the ever-growing market.
In the meantime, ICOs have seem to surpassed IPOs by popularity this year and the prognosis stays the same for 2018. Companies, startups, and major industries are now looking to raise money through ICOs. Such contradiction in the market between crypto regulation and the power and volume of ICOs may be problematic in the near future.