The cryptocurrency market lost a third of its value this week, about $200 billion. That is nothing to worry about, South Korean veterans of this young market claim. According to Reuters, cryptocurrency experts agree. A ban could, at most, discourage new market entrants.
However, the anonymity of buyers and sellers, coupled with the inherent ability to move digital assets anywhere in the world, makes imposing real restrictions very difficult, if not impossible.
Compared to South Korea, Hong Kong and Singapore have light regulations.
“In case the government shuts down all local exchanges, investors can always go abroad and open an account there,” a South Korean student told Reuters.
Alternatively, asking a friend who studies abroad to open an account is even easier. Neighboring Japan, for example, does not only have light regulations – the country is cultivating an ecosystem of companies and investors. Even German officials reportedly consider national restrictions “useless.”
Most South Korean crypto traders, however, don’t even have to cross borders. Something as simple as investing in a VPN (virtual private network) would enable them to hide their IP addresses and easily access decentralized exchanges, which can be accessed from anywhere in the world and don’t require identification. On top of that, these exchanges are linked to wallets such as Exodus and Jaxx. In most countries, authorities would need a warrant to check one’s devices for proof of crypto trading activity. Even then, a trader can claim no trading has taken place since the legislation’s approval.
“I hold everything in a hard wallet the size of my thumb. I have copies of my private keys in a safe. I have accounts on four exchanges on three continents. If any government wants my money, good luck to them,” a Hong Kong-based investor said.
“All this could lead to serious money outflow and only the government is not aware of it,” a company officer at a Seoul-based exchange claims.
Other industry experts agree worldwide prohibition is not to be expected. In a blog post titled “Why Governments Will Not Ban Bitcoin,” cryptocurrency blogger Charles Hugh Smith argued, “Those who see governments banning ownership of bitcoin are ignoring the political power and influence of those who are snapping up most of the bitcoin.”
“Crypto market movements have zero impact on the engineering work being done on the real protocols. Hype cycles come and go, code commits are here to stay,” founder of Blockstack, a network for decentralized applications, tweeted yesterday.
As cryptocurrencies plunge, gold soars
The volatility of the digital currencies market has, according to Bloomberg, prompted some investors to seek refuge in gold. Ross Norman, a London gold dealer told Bloomberg that customers in their mid-20s visit his shop, with laptops under their arms, with the intent of turning Bitcoin into physical metal.
South Korean crypto market veterans are not the only ones unfazed by these price fluctuations. The Virginia Beach Development Authority is investing half a million United States dollars toward a local company’s bitcoin mining facility, the Associated Press reported earlier today.