SEOUL, Dec. 14 (Korea Bizwire) – Bitcoin fever has officially swept the nation, but accompanying it is a marked increase in illegal activity that has concerned voices wondering whether the government should play a larger role in the industry.
Since its invention eight years ago, never has Bitcoin been a topic of greater interest, thanks to its valuations soaring seemingly daily without a hint of an actual ceiling.
Per Bloomberg News on December 11, the price of one Bitcoin went from $952 on December 30 last year to $2,000 by May, eventually doubling to $4,000 in August.
South Korea’s Bitcoin valuation trajectory was even wilder. In give or take a year (late December to November 26 this year), the cost to buy one Bitcoin leaped from 1.19 million won to over 10 million won (per Bithumb).
One of the knocks against Bitcoin and cryptocurrencies in general has always been the inherent risk associated with investing in the technology, as volatility evidenced by wild fluctuations in value is a constantly lurking possibility.
For instance, the price of one Bitcoin stood at 24.9 million won in the pre-noon hours of December 8. In the afternoon, the price had tumbled precipitously to 16.2 million won, all in a matter of hours.
However, such extreme highs and lows haven’t deterred prospective investors from taking a stab at making a fortune. According to South Korean cryptocurrency operator Bithumb, trading activity amounted to around 300 million won in the first month of the year. In a busy November, trade activity increased 182 times, registering 56 trillion won. For the sake of comparison, this year’s monthly average amount in transactions at the KOSDAQ, the domestic electronic stock market, was 68 trillion won.
The astronomical figures in cryptocurrency market activity are being powered by people from all walks of life, ranging from officer workers and housewives to public employees and high school students.
Stories of stay-at-home moms turning a 1 million won profit in a few days and messages on social media sites from teenagers boasting of their latest Bitcoin success have understandably turned heads.
An employed mother of a 3-year old agreed that such stories do cast a strong spell. She pointed out the difficulties young adults face in building up their nest egg, saying, “The middle-aged to older generation made big money from investing in real estate, but to 30-something office workers like us, insufficient capital and the abundant number of rules and regulations governing the real estate market make it difficult to get in there.”
With large sums of money flowing into the market and the government’s stance on cryptocurrency yet uncertain, illegal activity has become noticeably more prominent.
On December 12, the Korea Communications Commission fined BTC Korea.com in what was the first punishment meted out to a cryptocurrency operator (BTC Korea.com is an operator of Bithumb). The 60 million won fine was imposed in the belief that the cryptocurrency exchange had leaked users’ personal information.
Illegal foreign currency swaps have also become a thorn in the side of regulators. The demand predominantly comes from China, which banned ICOs (initial coin offerings) this September and allegedly pressured its three leading cryptocurrency exchanges into closing shop. Presently, Chinese customers who must purchase Bitcoins offshore put their money into foreign currency exchanges, which send the Chinese yuan to South Korea, convert the amount into won, and buy the requested cryptocurrencies.
This has left authorities deeply concerned over the losses incurred on national wealth. An anonymous source at the South Korean prosecution service told Yonhap News this week that the siphoning off of national wealth was becoming critical due to increased illegal activity in domestic and foreign currency conversion.
While the government busies itself with hammering out a framework of regulations befitting the nascent industry and regulators are preoccupied with weeding out lawbreakers, fortunes large and small are being won and lost by average citizens every other day.
Despite the emotional highs that come with winning big, some are left with mixed emotions, even those who gain from the current Bitcoin bull market.
One unwitting winner said that his wife had earned 1 million won in several days thanks to a sudden surge.
However, he expressed a tinge of bitterness when describing the sequence of events. “I barely make 3 million won a month putting in a full month’s work, but hearing that my wife made 1 million won in a matter of days just by sitting and doing nothing… It’s not a good feeling,” he said.
Kevin Lee (firstname.lastname@example.org)