The South Korean government announced new legislation today that would put increasingly tough regulations on the country’s burgeoning cryptocurrency markets. Under the legislation, Korea, which is the third largest market for cryptocurrencies in the world after the U.S. and Japan, would ban anonymous accounts and continually monitor crypto exchanges.
Perhaps more ominously, the Wall Street Journal reported as well that the Ministry of Justice is considering unilaterally closing all crypto exchanges in the country, although didn’t provide any detailed guidance or timelines on when such a policy might be enacted.
The news slammed cryptocurrency prices. Bitcoin was hit about 12%, dropping from around $15,500 to eventually hitting a bottom of $13611, according to Coindesk. Ethereum was hit about 8% in the aftermath of the news.
The proposed legislation on anonymous accounts is in line with recommendations from the Korea Blockchain Industry Association earlier this month which declared that currency operations between Korean Won and cryptocurrency-denominated accounts should only be allowed in cases where the identity of the account holder has been confirmed. 14 member exchanges agreed to that proposal.
The absolute frenzy of cryptocurrencies has taken the country’s leadership by surprise, and the government has raced to change laws to facilitate and regulate the industry. Earlier this month, the government also announced that it intended to tax cryptocurrency gains as capital gains in an attempt to stem the onslaught of cash coming in from Korean consumer investors.
Despite wide popularity among the Korean public, there have been increasing concerns that Korea’s exchanges are insecure. Last week, one of the most prominent Korean cryptocurrency exchanges, Youbit, collapsed following a $35 million hack earlier this month. That was after a $72 million hack on the exchange in April.
As I discussed last week on TechCrunch, there is increasing evidence that North Korea has been using bitcoin trading as a key side business moneymaker for the Kim regime. Through hacks on traditional banks and its threatening nuclear weapons posture, the regime has attempted to undermine faith in traditional institutions, pushing more investors to cryptocurrencies as a safer, more stable bet. Eliminating anonymous accounts would be one step to help prevent the North from infiltrating the South’s crypto infrastructure.
Litecoin, the fifth-largest coin by market cap has seen it's value explode over the past 48 hours. It is currently trading above $350 on most exchanges. With this excitement also comes a sobering reality as emphasized by Litecoin creator, Charlie Lee.
The former director of engineering at crypto exchange Coinbase tweeted a warning for potential litecoin holders Monday night:
"Ok, sorry to spoil the party, but I need to reign in the excitement a bit…," he wrote. "Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can't handle LTC dropping to $20, don't buy!"
I appreciate Charlie for being straight forward with his opinion and I continue to gain increasing respect for Litecoin and what he's doing with the currency.
by Whit Gallimore
Binance, is a cryptocurrency exchange founded by a team of fintech and crypto experts. There are claims that it is capable of processing more than 1.4 million orders per second, making it one of the fastest exchanges in the market. At first glance, it appears that the platform focuses on security, robustness, and execution speed. As part of their growth offerings, they announced yesterday that they've begun to add Stellar lumens (XLM), the native digital currency of the Stellar network trade. This new listing of XLM will allow cryptocurrency traders the opportunity to have an additional avenue to purchase or sell XLM tokens.
Here's some information about Stellar:
Stellar is an open-source blockchain network that provides interoperability between financial institutions and different payment networks, making cross currency and cross asset payments much faster, more efficient, and less costly than ever before. Stellar’s distributed ledger provides an instant clearing and settlement platform, enabling money to move directly between people, companies and financial institutions as easily as email. Within the network, lumens serve as a bridge asset between pairs of different currencies.
“We’re thrilled that Binance is now supporting XLM,” said Jed McCaleb, cofounder of Stellar.org. “We believe that as more people hold XLM, it will positively contribute to the growth of the Stellar network. This will help Stellar reach its goal of becoming an open standard for our financial system, in order to make financial transactions quicker and more cost-effective than ever before.”
“We like the strategic approach of Stellar’s results-driven team and its growing community. We believe the collective efforts of focused projects like this are necessary to move the blockchain industry forward,” says Changpeng Zhao, CEO of Binance.
by Whit Gallimore
Current trading price is $15,805.30 at Kraken Bitcoin Exchange www.kraken.com/charts
We'll keep you updated with developments.
by Whit Gallimore, Editor of Finance2o.com
Once again the price of bitcoin breaks an all-time high. Trading on Kraken Bitcoin Exchange shows Bitcoin trading at $13,700.00 and CoinMarketCap.com is showing a price of $14,006.50 which puts Bitcoin's total market capitalization at approximately $234 billion. Also of note, CoinMarketCap.com shows that South Korean exchanges Bithumb, Coinone and Korbit are reporting trades above $15,000.
by Whit Gallimore, Editor of Finance2o.com
This post has been updated to reflect current market conditions
Bitcoin's recent – and eye-popping – price movements above $12,000 have some observers saying the market is in bubble territory.
While he's not ruling it out entirely, Naval Ravikant, the co-founder of AngelList, holds a less alarmist view.
"Money is a bubble that never pops," he said at yesterday's Token Summit II in San Francisco, adding:
"It's a consensus hallucination."
And speaking to the newfound attention to bitcoin, as displayed by the upward price trajectory this year, Ravikant said people are interested in growing the wealth that they have.
With most savings accounts returning zero these days – as central banks conduct what Ravikant called their "grand money printing experiment" – the general public is looking for alternative places to store their money and watch it grow. Bitcoin and other protocols seem to offer that, as even the less-developed cryptocurrencies are showing substantial returns.
"I think people are looking to solve their money problems," he said.
Yet at the same time, he warned that some of the cryptocurrency industry has been overhyped. In particular, Ravikant believes the market puts way too much faith in the concept of decentralization.
"One indicator we are in a very frothy environment is we have a lot of tokens trading at very high values that are junk," he said, without specifically naming any. "Right now, I think the market isn't distinguishing quality."
Having said that though, Ravikant concluded that the cryptocurrency economy is here to stay.
In fact, he gave the audience some insight into what cryptocurrencies he's interested in. These include bitcoin, for storing value; zcash, for transacting easily; basecoin, to act as a stable unit of account; and tezzies, to access the Tezos smart contract platform.
"I think we'll see a lot more of the money use cases realized," he predicted, adding:
"If you can redefine what money is, that's a trillion dollar outcome."
written by Brady Dale courtesy of www.CoinDesk.com
Brady Dale is a reporter who has previously written for Fortune, Brooklyn, Next City and Motherboard, among others. He grew up in Kansas and lives in Brooklyn.
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