After a recent ruling by the supreme court about the legal situation of cryptocurrencies, the south korean government has issued an official statement clarifying its position, declaring that its stance should be separated from that of the judiciary.
South Korea’s Financial Services Commission issued the statement as a way to separate the criteria between the two bodies. In declarations collected by Aktv, Hong Sung-Ki was emphatic in his approach:
“The judgment of the Supreme Court and the position of government policy should be viewed separately.”
The problem lies in the possibility of determining whether or not cryptocurrency is a financial product.
According to FSC Chairman Choi Jong-gu’s remarks, the Supreme Court does not provide a clear answer to this question:
“The Supreme Court recognizing asset value and whether virtual currency is a financial product…is a separate issue.”
For Kim Dong-yeon, Minister of Strategy and Finance for the korean government, “Virtual currencies such as bitcoin are not financial assets.”
However, the Supreme Court has a different view, having decided in one case that “cryptocurrency is recognized to have value so it can be confiscated.”
Supreme Court of South Korea
Such is the importance of words when it comes to legal issues: An asset with financial value is not the same as a financial asset.
One of the reasons why it is essential to be aware of decisions taken by the south korean government is that it has one of the world’s largest markets for cryptos, and many of the executive actions generate market responses with consequences.
One example of this was the fall in BTC prices in early 2018, attributed by several analysts to the fear of a possible ban of some significant exchanges due to some declaration of major officials of the korean government.
Regarding the difference in criteria among regulators, FnNews quoted an official of the Korean Blockchain Industry Association praising the ruling of the supreme court:
“The government and the National Assembly should pay attention to the ruling of the Supreme Court and plan a policy to incorporate cryptocurrency transactions into the system as soon as possible.”
Currently, the association works closely with several important exchanges such as Bithumb and Upbit in the field of legal advice. This is a matter of priority not only because of the importance of the market but also because of the difference in criteria between the different bodies.
South Korea: An Important Player in Global Markets
According to Yahoo Finance, after the Supreme Court’s decision, the prices of several cryptos fell in the short term graphs:
“Bitcoin was trading at $7,394.1 by 12:27AM ET (04:27 GMT) on the Bitfinex exchange, down 1.37% over the previous 24 hours.
Ethereum, the world’s second largest cryptocurrency by market cap, lost 2.8% at $563.25 on Bitfinex.
Ripple’s XRP token shed 2.67% to $0.59675 on the Poloniex exchange.
Meanwhile, Litecoin dropped 2.38% to $117.57.”
Currently, the prices of the Top 10 cryptos on Coinmarketcap have achieved some stability. All currencies except IOTA see a bullish trend, especially EOS, which has gained more than 20% in 24 hours thanks to the expectations of the launch of its mainnet.
Top 10 Cryptos. June 2, 2018 / Courtesy: coinmarketcap.com