Bitcoin Daily: South Korea’s Crypto Flip Flop, Singapore Frets Over Future Crash

Following raids on crypto exchanges, the South Korean government said Monday (Jan. 15) that it will make a decision on a cryptocurrency exchange ban after “sufficient consultation and coordination of opinions.”

Last week, CNBC reported that Justice Minister Park Sang-ki said the government was working on a bill to prohibit trading via the country’s cryptocurrency exchanges. On the same day, the exchanges were reportedly raided.

In cybersecurity news, unknown hackers – or possibly a single hacker – have reportedly hijacked the domain name server (DNS) for BlackWallet.co, a wallet application for the Stellar Lumen cryptocurrency (XLM). According to Bleeping Computer, more than $400,000 has been stolen from users’ accounts.

“The DNS hijack of Blackwallet injected code,” Kevin Beaumont reported on Twitter. “If you had over 20 Lumens, it pushes them to a different wallet,” he added.

In Singapore, the head of the country’s central bank said he hoped the tech that powers cryptocurrencies – like the blockchain – would not be undermined by a crash in digital currency, which he seemingly thinks is more of a “when” than an “if” event.

“I do hope when the fever has gone away, when the crash has happened, it will not undermine the much deeper, and more meaningful technology associated with digital currencies and blockchain,” said Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), according to Reuters. The city-state has been positioning itself as a hub for FinTech, but it has advised “extreme caution” about purchasing cryptocurrencies. Still, Menon said he would not rule out the possibility that the authority would issue a cryptocurrency directly to the public.

Menon does have a point, as researchers Neil Gandal, JT Hamrick, Tyler Moore, and Tali Oberman have published a paper on bitcoin price manipulation, which describes the extent to which the bitcoin ecosystem is controlled by bad actors. According to TechCrunch, the paper, entitled “Price Manipulation in the Bitcoin Ecosystem,” appears in the recent issue of the Journal of Monetary Economics.

In the paper, its authors claim that “suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.”