I'm going to talk a little bit about the steps of South Korea regulators on cryptocurrency, which I would say triggers of the very beginning of this bear market. As a South Korean, I think I can tell what's really happening in South Korea - not in an unbiased way but maybe closer to the fact.
1. Why did South Korean regulators mentioned "foreclosure of cryptocurrency exchanges"?
- Superficial/minor reasons: (a) to protect Korean folks from speculative assets (b) prevent money laundering / tax evasion
- Real/major reason: To boost the KOSDAQ markets (Korean's NASDAQ where SMEs are enlisted)
The situation is that the new South Korean gov't has long been trying to boost the stock markets and published a bunch of policies to do so like - lowering hurdles for SMEs to be enlisted in the KOSDAQ , providing tax cut for dividend yields stemmed from the stock markets etc.
However, few people had interests in those stock-market boosting polices whatsoever - cryptocurrency boom in the last December gave investors much more returns than any other markets (of course you guys know well). Editorials and research papers in South Korean then criticized the government and asked further boosting polices which draw investors from the cryptocurrency markets. So the gov't brought the best(worst) option to the table.
2. But South Korean gov't now try to keep big exchanges remain and decided to allow new investors from Feb 6th
Sorry that there is no English news for the link - you can translate using the Chrome translator. MK news is the biggest economic news in South Korea like CNBC, Bloomberg. Furthermore, in the parliament yesterday, policymakers, blockchain researchers and the CEOs of cryptocurrency exchanges are gathering to discuss how to improve & boost cryptocurrenty trading and ICOs in South Korea
Why is gov't negative stance on crypto changed? the short answer is the general election coming in June
The majority party in South Korean confronts the general election coming in June but support rating for the party has dropped ~10%p to 60% for the last 3 wks mainly driven by millennials who are the majority investors in crypto markets. Minor parties also blame the majority party for triggering crypto market plunge due to inconsistent gov't officials' speeches on cryptocurrency. Not only sharp drop in millennials' support ratings as well as other inconsistent policy package against capitalism have continuously frustrated people.
3. So what?
There will be no meaningful measure to be announced going forward even including tax. Any new tax bill should get majority approval from parliament but the president's party needs coalition w/ either the 1st or the 2nd minor party to pass the bill. As both minor parties have easing stance for cryptocurrency and politically against the major party's policy, it is obvious that the government can't make tough bill on crypto.
I am writing this as I've seen that Korean news have not been delivered appropriately. It looks reporters sometimes do not understand the situation or try to pull off provocative headlines for more hits or not diligent to translate every news regarding crypto. For instance, when the ministry of justice announce they consider foreclosure of all crypto exchanges - it was translated quickly and delivered to the globe but a few hours after the announcement, the ministry of finance also announced that they did not agree w/ the ministry of justice. The day after the announcement, the president said the government has no plan to shut down any cryptoexchanges - those positive articles were not delivered that fast and translated at all...
Going forward I'll put some update regarding South Korea's regulatory move on cryptocurrency here.