South Korean Investors Furious With New Blockchain Requirements

Why crypto investors are upset about some major changes coming to the market revealed.

Will McCormick
Read +
Follow Us

According to a report from CCN, the South Korean Blockchain Association has approved the security measures and management systems for 12 cryptocurrency exchanges. Some of these companies include UPbit, CoinZest, NeoFrame, and Bithumb among others.

Despite the fact that a new wave of capital is expected to come to South Korea's crypto market ever since the market was essentially shut down after the government made the call to drastically improve regulations for the country's crypto market, most South Korean investors are very angry at the moment.

Why Are Investors Upset With Bithumb's Approval? 

Although the South Korean Blockchain Association's decision is being considered a positive announcement to many, the majority of investors do not share the same thought process specifically because of the decision to approve Bithumb. Last month, Radarzero reported $30 to 40 million was stolen from Bithumb and only $16 million has been recouped after the hack thus far.

More important than the money, investors have lost all of their trust in the cryptocurrency. After the security breach, the exchange disabled withdrawals and deposits immediately and still has shown no signs of reopening them in the future. Because of Bithumb's decision to prevent users from controlling their money, premiums have re-emerged in the market, which the government tried to eliminate.  

Kim Yong-bum, the Financial Services Commission chairman had the following to say: 

“The government’s practical policies led the ‘Kimchi Premium’ to disappear in South Korea. At its peak, the ‘Kimchi Premium” in the local cryptocurrency exchange market reached 50 percent, due to unusual spike in demand and speculation. As of current, the price of cryptocurrencies is nearly identical to other markets, demonstrating stability in the South Korean cryptocurrency market.”

Why Was Bithumb Approved By the South Korean Blockchain Association?

It's understandable why investors would be skeptical about the cryptocurrency market and Bithumb is a logical place to point the finger of blame, but the regulation changes should be more of a sigh of relief for investors. Apparently, the South Korean Blockchain Associaition considered the security systems for the approved crypto exchanges, not their business operations or any other factors.

With the approved cryptocurrencies, the South Korean government can reboot and tighten regulations in the market to help grow crypto and blockchain companies the right way and the entire cryptocurrency industry will be better for it. It just may take investors some time to rebuild their trust in the companies within the market.