South Korea, one of the most digitally connected country, is also where the second highest number of cryptocurrency traders and invest exist. Seoul is the probably one of the most internet dense cities with faster broadband access than 80% of the rest of the world.
With such infrastructure and digital citizens, no wonder, Korea has become a major cryptocurrency hub. Millions of people are actively trading high volatile digital currencies and like every country, the South Korean govt is trying to educate their citizens and the major cryptocurrency exchanges about their tax obligations. As part of this, the national tax authorities have raided two of the biggest Korean exchanges, Bithumb and Coinone.
The Korean finance authorities have also raided major banks which offer institutional cryptocurrency trading accounts and fear that more adoption of this might result in an increase of crime. They were also trying to limit the trading of cryptocurrencies as the demand is growing exponentially among the citizens of the 4th largest economy in Asia.
Pumped with millions of new investors who joined the cryptocurrency bandwagon who are selling off at any negative news, the markets in red ticker is not surprising. Ethereum(ETH), the only currency in the top 10 which hold the sell-off in the last 2 days has also gone down by over 10%.
Ripple, which has seen a major correction after the Coinmarketcap accidentally removing the Korean exchange from the Global Average price calculation, further went down and is now trading at $1.6. Bitcoin and most of the other altcoins were free falling with a notable exception of EOS Coin which ranks 13 in terms of global market cap.
With the news from China that the country is trying to drive away Bitcoin Miners, regulatory challenges for fund managers to launch Bitcoin ETF’s in the USA, tax, financial law challenges in India and now the tax issues in Korea, the cryptocurrency markets as a whole is facing a major challenge. But this is not the first time, the markets responded negatively to a regulatory challenge, but what’s different this time is the millions of investors who joined the Cryptocurrency Investing during All-Time-High’s. They sure will be disappointed.