Home / Archive / South Korea’s Cryptocurrency Fiasco is Fueling a Political Conflict

South Korea’s Cryptocurrency Fiasco is Fueling a Political Conflict

Last Updated March 4, 2021 5:03 PM
Joseph Young
Last Updated March 4, 2021 5:03 PM

The controversial decision of Justice Ministry head Park Sang-ki to release a premature and false statement on a potential cryptocurrency trading ban has fueled a political conflict between the current administration and other opposition parties.

Opposition Party Accuses Justice Ministry of Market Manipulation

Earlier this week, a South Korean mainstream media outlet Hankyoreh, a daily newspaper created in 1988, reported that opposition parties of the South Korean government criticized the President Moon Jae-in administration for manipulating the cryptocurrency market and ridiculing the citizens.

On January 11, Justice Minister Park claimed that the ministry is working on drafting a cryptocurrency trading ban bill to effectively shut down cryptocurrency exchanges. Merely hours later, the Ministry of Strategy and Finance, which initially found out about the claims of Minister Park through media reports, firmly emphasized that it does not support or agree with the personal statement of Minister Park.

On January 12, the Blue House, the executive office of President Moon Jae-in, issued a public statement and an apology to South Korean citizens regarding the recent cryptocurrency trading ban controversy, and noted that a ban will not be imposed in the short-term.

A spokesperson of the Bareun Party, one of the main opposition parties of the South Korean government, heavily criticized the Moon administration, stating that the premature statement of Minister Park led the entire global cryptocurrency market to plummet in value and led to billions of dollars in losses.

“It was an unacceptable behavior which did not take the South Korean citizens into consideration. The trading ban claim of Justice Minister park was a mockery against the South Korean people,” said Yoo eu-dong, the Bareun Party spokesperson.

A spokesperson of the Kookmin Party, another opposition party of the South Korean government, also noted that the South Korean government remained silent about cryptocurrency regulations and overnight, damaged the cryptocurrency market with a false ban announcement.

Another spokesperson of Jayoo Party stated that the South Korean government forced the public to view cryptocurrency investors as uninformed gamblers through the statement of Minister Park, and criticized the government for the recent incident.

Immense Economic Impact

Most of the criticisms by opposition parties were targeted at Justice Minister Park, who failed to consider the immense economic impact his words could have had on the global cryptocurrency market. The scale of losses throughout the week was in the billions, and more than 150,000 citizens have signed a petition to reject the trading ban bill and remove Minsiter Park from office.

The South Korean finance market is relatively small in comparison to other major regions such as Japan and the US. Given that the cryptocurrency exchange market processes more trades on a daily basis than KOSDAQ, South Korea’s main stock market, the closure of the cryptocurrency market could damage the economy of South Korea at the same scale as closing down the stock market.

With the recent cryptocurrency trading ban controversy, the South Korean government has discovered the economic impact of strict regulations on the South Korean finance market and as such, it is unlikely that the government will impose regulations in abrupt manner.

Featured image from Shutterstock.