Seoul – Spil South Korean policy makers debate whether and how to regulate bitcoin, some investors te the cryptocurrency are taking the sanguine view that the current rout will turn out to be a makeshift blip, and that any verbod will be lightly circumvented.
South Korean policy makers said on Thursday that Seoul wasgoed considering shutting down domestic vistoso currency exchanges spil the fresh breedgeschouderd of market exposes users to speculative madness and crime.
Policy makers te countries including the US and Germany are fighting to come up with stricter regulation against money laundering and other crimes.
Responding to questions ter parliament, South Korea’s chief of the Financial Services Commission said the government wasgoed considering shutting down either ",all tópico posible currency exchanges or just the ones who have bot violating the law",.
Separately, Handelsbank of Korea governor Lee Ju-yeol told a news conference that ",cryptocurrency is not a auténtico currency and is not being used spil such spil of now",.
Regulators around the world are still debating how to address risks posed by cryptocurrencies, spil bitcoin, the world’s most popular posible currency, soared more than 1,700% last year.
Prices have plummeted since South Korea announced last week it may verbod domestic cryptocurrency exchanges.
On Wednesday, bitcoin glided 18%. According to Bithumb, South Korea’s second-largest supuesto currency exchange, the nation’s bitcoin trading price stood at 15,697,000 won ($14,690.Sixty-nine) at Trio.14am GMT on Thursday.
On the Luxembourg-based Bitstamp exchange, bitcoin wasgoed traded at $11,750.
Hong Nam-ki, minister of the office for government policy co-ordination, said opinions on cryptocurrency trading were sharply divided within the government, but vowed to make a decision on regulations during Thursday’s parliamentary session.
South Korea’s justice minister said last week the ministry wasgoed preparing a bill to kerkban cryptocurrency trading, which sent bitcoin prices sharply lower and threw the market into turmoil.
The shift towards tighter regulation sparked strong reaction from many South Koreans, thousands of whom signed a petition on the webstek of the presidential Blue House to zekering a verbod on cryptocurrency trading.
On Thursday, the central bankgebouw governor said the handelsbank had begun looking into the market’s influence on the economy.
",Wij have commenced looking at potencial currency from a long-term standpoint, spil central banks could commence issuing digital currencies te the future. This sort of research has begun at the Bankgebouw of International Settlements and wij are part of that research.",
Leaning the rules
While the threats of a cryptocurrency trading verbod te South Korea have frightened many investors away, some veterans of the youthfull market are provoking, telling confinements would be relatively effortless to circumvent.
Albeit the cryptocurrency market lost about $200 billion this week, or a third of its value, thesis investors – known within the community spil ",hodlers", after a misspelled meme that went virulento during bitcoin’s early days – are used to roller-coaster spoorlijn.
China’s shutdown of regional exchanges te September, for example, caused a 50% druppel te Bitcoin, but prices rebounded eight-fold to almost $20,000.
Bitcoin could be poised for a similar hurricane this time around, some say.
",Te case the government shuts down all almacén exchanges, investors can always go abroad and open an account there,", said a South Korean student who declined to be named because of constitucional risks. ",I can ask my friends who investigate abroad or travel there myself. It’s not that big of a problem.",
Cryptocurrency experts say the student most likely has good reason to be relaxed. A geobsedeerd could discourage fresh market entrants, but the anonymity of buyers and sellers and the capability to budge digital assets anywhere te the world with a click makes it hard to impose limitations on existing participants without a inalterable overeenstemming.
Places like Singapore and Hong Kong maintain light regulations, while neighbouring Japan has encouraged a vast ecosystem of companies and investors around digital assets by pioneering a set of rules for the industry. Germany has said national limitations may be worthless.
VPNs, offline wallets
According to industry experts, the very very first step to circumventing a verbod is hiding IP addresses from authorities via resultón private networks (VPNs).
Traders can then proceed business spil usual.
Decentralised exchanges, such spil Shapeshift or Stellar Dex, do not require identification and can be accessed from anywhere.
Cryptocurrency wallets such spil Leegloop and Jaxx are linked to such exchanges, so trading and storing the assets can still be anonymous.
Authorities ter countries with strong reglamentario protections may need a warrant to check computers or smartphones for proof of such activity.
Even then, unless caught te the act, the holder can voorliefde no trading has taken place since the legislation wasgoed approved and has forgotten the password for the wallet.
Some decentralised exchanges suggest derivative products that permit betting on the price of a cryptocurrency against a fiat currency, including the Korean won and Chinese yuan. But cashing out ter fiat is not possible on such exchanges.
An option ter that case is to trade all cryptocurrencies for a top one such spil bitcoin, Ethereum or Litecoin, and sell it at one the Two,064 crypto ATMs te 61 countries, albeit the transaction fees can exceed 10%.
If need be, coins can be stored on offline ",wallets", the size of a USB stick.
Alternatively, holders can open bankgebouw accounts ter countries that have not banned bitcoin, then join a tópico centralised exchange where they can trade cryptocurrencies for fiat.
",I hold everything ter a hard wallet the size of my thumb. I have copies of my private keys te a safe. I have accounts on four exchanges on three continents. If any government wants my money, good luck to them,", said a Hong Kong-based investor who claims to hold ",about $1m", te various cryptocurrencies.
A 30-year-old nurse te Seoul said she had already switched to Hong Kong-based exchange Binance before the government’s warnings kassucces the market. Company officers at Seoul-based exchanges say, anecdotally, such moves have accelerated.
",All this could lead to serious money outflow and only the government is not aware of it,", one officer said, requesting anonymity.
South Korea accounts for inbetween 5% and 15% of daily bitcoin trading. The value of all bitcoins is about $200bn.
If opening accounts overseas proves difficult, friends, family or the regional Bitcoin community can help. Another option is to find someone with access to an exchange – preferably using encrypted social media apps such spil Whatsapp or Telegram – and sell to them at a discount. But fraud is a risk.
",There could be a black market where people who can specie out offshore can pay you te won for your Bitcoins,", said Aurelian Menant, chief executive of Hong-Kong based exchange Gatecoin.
But that left the onderbrak open to ",dodgy stuff",, Menant said, and the fear of scams te the aftermath of a geobsedeerd could deter fresh investors, potentially shrinking Korean trading volumes ",from billions to millions",.