Bitcoin

South Korea Crypto Ban? No Sweat, Say Traders

The looming specter of regulatory crackdowns in South Korea on bitcoin and other cryptocurrencies may leave one population collectively shrugging: crypto traders.

Reuters reports that if a trading ban does indeed come to pass, some investors and traders would find it “relatively easy” to work around any restrictions imposed by the government.

At this writing, bitcoin has lost about a third of its value in just the past several days. But no sweat for traders, said the newswire, or, as they are commonly known, “hodlers.”

The way to get around the crackdown? Hodlers interviewed by Reuters said the trick is not to trade on local exchanges but to buy and sell abroad. Said one unnamed student of opening accounts outside their home country, “I can ask my friends who study abroad or travel there myself. It’s not that big of a problem.”

Industry observers say that would-be traders may be turned off from entering the market domestically.  But the patchquilt of regulations means that fund flows can indeed travel the globe and find exchanges on which to trade cryptos. For example, restrictions are relatively tame in Hong Kong, and Japan has been vocal and visible about encouraging the industry’s growth (and trading).

Virtual private networks can offer a conduit for anonymous trading, far-flung, and some exchanges do not need identification from those accessing their operations. In addition, some crypto wallets already link to those exchanges, furthering desired anonymity. For liquidity’s sake, traders can opt to do business sin bitcoin or Ethereum and sell those holdings at ATMs (of the physical kind), which can be found in about five dozen countries. Or, as Reuters noted, they can open bank accounts in countries where bitcoin is (still) legal.

Turning specifically to South Korea, where as much as 15 percent of daily bitcoin trading takes place, family and friends can set up accounts offshore, leveraging social media applications such as Telegram.  And, noted Aurélien Menant, CEO of Gatecoin, which is an exchange in Hong Kong, “there could be a black market where people who can cash out offshore can pay you in won for your bitcoins.”

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