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South Korean Government Talks of ‘Overheated’ Market as Cryptos Soar

Regulation

South Korea

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Tim Alper

Author

Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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Last updated:

June 26, 2023

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The South Korean government has held meetings with ministries to address skyrocketing cryptocurrency prices, while trading volumes rise quickly at domestic exchanges.

Per media outlets Kyunghyang Shinmun and SBS CNBC, the meetings have involved the finance ministry, the justice ministry and the Financial Services Commission – the country’s top financial regulator – who have all expressed concern about a sudden spike in prices.

Sources say the government believes the market is “overheated.” Last time it used terminology like this, Seoul ended up issuing a blanket ban on initial coin offerings (ICOs) and came close to closing down the country’s exchanges.

The media outlets quoted a government spokesperson as saying, “Cryptocurrency prices have been rising steadily in recent years, so we are closely monitoring the market now. Cryptocurrencies are not legal tender and nobody can guarantee their value.”

The government spokesperson added,

“Illegal activity such as fraud and multistage attacks on are strictly prohibited by both law enforcement agencies and financial authorities. We will crack down hard on offenders.”

The government is also mulling asking the National Assembly to make amendments to the Specified Financial Information Act, a piece of legislation that already contains clauses pertaining to anti-money laundering measures and fintech.

Per Segye Kyungjae, the government says it wants to “prioritize the prevention of damage to investors,” and will look to “hurry” any legislative changes through parliament, as part of its “active response” plan.
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Trading volume on major Korean crypto exchange Bithumb: