South Korea bans Bitcoin futures

The South Korean traders often lead the price rallies in the crypto currency market. However, the government of South Korea is increasingly taking a tough stance against the nascent and evolving market. The latest in the list of tough measures announced to curb crypto currency market is the announcement of a blanket ban on trading in Bitcoin futures to be offered by CME and CBOE. Ironically, its neighbor Japan has already legalized Bitcoin and approved four Bitcoin exchanges.

The South Korea’s Financial Services Commission (FSC) announced that it will not permit trading Bitcoin futures by its citizens. The legislator went to the extent of saying that offering derivatives of crypto currencies to its citizens is illegal.

The announcement led to a cancellation of multiple informational seminars on derivatives trading, according to Korean Herald. One of the noteworthy cancellation is that of Shinhan Financial Investment, a subsidiary of the Shinhan Financial Group, which announced that its banking division is developing Bitcoin wallet facilities for its clients.

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Analysts feel that allowing the country’s traders to participate in the futures market would have been the right way forward to cool down the overheated market. However, South Korean authorities do not believe so and are trying to put in place stringent controls on block chain related activities. Earlier this September, the country banned ICOs (Initial Coin Offerings). Further, traders are not allowed to have more than one crypto currency trading account, which is linked to the real identity.

More worrisome is the fact that the legislators are considering income and income transfer taxes on payments made through Bitcoin and other crypto currencies. According to Business Korea, the collective aim of the South Korean government is to tax the income by tracking the crypto currency transactionsdone by individuals.

Commenting on the announcement, ex-Korbit exchange CEO Kim Jin-Hwa stated that the path breaking technology is hamstrung by the regulation.

However, the value of Bitcoin did not suffer any reversal despite the South Korea’s announcement. In fact, the crypto currency forged higher to cross the $13,000 mark. That underlines the strong fundamentals that drive the price. Following CFTC’s approval for listing Bitcoin in CME and CBOE exchange, Japan has announced that it would soon amend the securities law and approve futures trading in Bitcoin.

In this regard, Shozo Ohta, CEO of Tokyo Financial Exchange, stated that it is studying various aspects of Bitcoin, including the impact it will have on the Japanese society. Investors would certainly hope that countries like South Korea, China, and India soon understand that the technological developments can be only stream lined, but cannot be stopped completely.

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