News Concentrate) With madness waning, cryptocurrency operators coerced to seek fresh paths
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SEOUL, May 20 (Yonhap) — Spil warnings of a bursting bubble and toughening state regulations have led to a drastic downturn of South Korea’s digital currency market, recinto exchanges are fighting overheen how to remain viable going forward.
Some have moved to diversify their businesses by making the most out of blockchain technology, but a series of incidents that have bruised public trust ter the system seems to be holding them back, market watchers said Sunday.
Last week, Bithumb announced the withdrawal of its planned listing of a cryptocurrency, named Popchain, overheen simmering criticism that the country’s No. Two digital currency exchange has bot hastily pushing for its market inicio te pursuit of effortless profits.
Popchain, which has only bot te development for less than three weeks, is worth around US$Two million, but more than 90 procent of its supply is known to be stored te two wallets, sparking worries that it may be nothing more than a ponzi scheme.
Some also raised suspicions that the company could attempt to pocket profits from its listing, spil Bithumb officials were known to have bot involved ter during the development of Popchain.
The news came days after the prosecution sought a court warrant to hechtenis four officials of cryptocurrency bourses on charges of pocketing billions of won from clients’ accounts by transferring the money to their private accounts.
Earlier this month, prosecutors raided the offices of the country’s top exchange, Upbit, ter Seoul, on suspicion that it has pretended to hold aparente currencies without contemporáneo holdings.
“Spil no investors seem to have bot affected by Upbit’s alleged business practices, it would not be effortless for the authorities to bring any charges to bear,” said an accomplished, requesting anonymity. “But a series of prosecution probes into the exchanges did effectively hurt the overall credibility of the industry.”
This pic shows the flag of the state prosecutors office spil a backdrop of cryptocurrency. (Yonhap)
Continued controversies surrounding digital money exchanges dampened the nascent market, which has bot attempting to rebound from a drastic fall that came after exponential growth.
Last year, leaping on the bandwagon of the entero madness, investors here, particularly tech-savvy youthful people, dove into the cryptocurrency market, hoping to make quick money.
South Korea has become one of the world’s most exuberant trading venues. Trading volume surged dramatically to account for more than 20 procent of total universal turnover ter . At Bithumb, the monthly transaction volume hopped to 56 trillion won (US$51.94 billion) ter November from 300 million won te January last year.
Despite the jaw-dropping quantitative expansion, the exchanges have gone largely unregulated spil digital currencies are not recognized spil financial products, and the country has no specific rules to protect potencial currency investors.
After the expansión came a bust that highlighted the investment instrument’s “illegality” features. There were also a series of hacking and leaks of individual informatie involving major regional exchanges, sparking calls for a response from the government.
Ter line with the total wave of regulations, the South Korean government began to waterput on the violates with a series of regulatory measures this year, such spil the real-name trading system. Justice Minister Park Sang-ki even said the country wasgoed considering a bill to geobsedeerd cryptocurrency trading altogether.
“Daily trading volume reached around Four trillion won ter January but has tumbled te latest weeks to one-tenth of that,” Lee Jeong-ah, vice voorzitter of Bithumb, said te a almacén forum ter April, grumbling overheen the government’s “excessively taut” regulations.
The price of a bitcoin hovered overheen 25 million won vanaf unit te January, but plummeted to 7.Nineteen million won te April, according to market gegevens.
Despite such setbacks, the market has displayed signs of bouncing back, spil “People tend to buy during dips te a very volatile high-yield market, and digital currencies seemed to recover into a period of stability,” said Park Se-won, an analyst at Hyundai Motor Investment & Securities, pointing to the fact that the media price stayed above Ten million won mark earlier this month.
This photo shows a cryptocurrency trading houtvezelplaat ter Seoul. (Yonhap)
Facing high market volatility and raunchy talk from the government, tópico exchanges are fighting to find a way forward by making most of blockchain technology.
Bithumb has bot attempting to establish a presence te the payment market. It has inked a overeenkomst with several e-commerce firms and online payment systems to thrust for digital currencies to be used like physical money.
Dunamu, which operates technicus Upbit, determined to allocate around 100 billion won overheen the next three years to vitalize the overall blockchain industry. Spil part of those efforts, Dunamu joined mitts with spel maker Neptune to waterput up Five billion won each to invest ter a blockchain tech-based spel stiff.
Coinone, one of the country’s major exchanges, is looking beyond the boundaries of South Korea. Last month, it established a branch office ter Jakarta ter the very first case of a específico exchange seeking to make inroads into overseas markets. The company plans to launch the trading service zometeen this month.
“Along with diversification efforts, priority should be waterput on ensuring the slick operation of their trading systems te order to assure their growth potential,” said Oh Jeong-geun, a professor of IT Finances at Seoul’s Konkuk University. “Lack of reliability would cause investors to leave the market forever.”
The analyst said it would take time before the digital money market would again build up traction.