According to Reuters, the South Korean government called an emergency meeting on Wednesday to address the bitcoin mania frenzy. The government is looking for a possible capital tax gains as well as allowing certain approved exchanges to be able to operate.
The government also want to protect traders and prohibit trading and opening cryptocurrency accounts by financial institutions, minors, and non-residents, according to a statement by the Office for Government Policy Coordination.
For exchanges to be eligible, they will need to provide investor protection rules and disclose all bid and offer quotes. After that, exchanges will need approval from the government, but as for now, South Korea has issued a halt on exchanges for the meantime.
Cryptocurrency has become such a huge scene in South Korea that people coined a new term: bitcoin zombies. The term is used for crypto traders who are constantly on a mobile device or computer checking prices and volatility. South Korea alone accounts for nearly 20 percent of total global bitcoin transactions.
One South Korea’s biggest and busiest exchanges, Bithumb says it will fully comply with the government to regulate the cryptocurrency and protecting traders on its platform. Bithumb ranks among the top 10 cryptocurrency exchanges in terms of circulating volume.
Bithumb was hacked back in June 2017 and affected 30,000 users out of a near total of 1.5 million users. Users range anywhere from young students to retired elders. The platform accounts for almost 80 percent total bitcoin trading in South Korea.
Hacks like these also add fire to the concern about cryptocurrency. The South Korean government is afraid that North Korea will hack and obtain digital currency to fund its military operations and equipment. The hacks began to grow and became more frequent after the U.N. had put sanctions on North Korea.
Although cryptocurrencies aren’t technically a government controlled form of currency, other Asian countries have already implemented regulations. Countries such as China have moved to ban initial coin offerings or ICOs, while Beijing itself has stopped all trading. Japan is requiring operators to register with the government.
Ultimately, if the South Korean government, exchanges, and its traders cannot reach a mutual agreement, the government may opt to ban cryptocurrency in order to protect its citizens.