SEOUL (Reuters) – The Seoul-based operator of the world’s busiest digital forex change Bithumb mentioned on Tuesday it should totally adjust to potential rules from the South Korean authorities and adequately capitalize itself to guard its shoppers.
BTC Korea.Com Co. additionally informed Reuters it should “actively cooperate to construct a proper algorithm”, which can embody steps reminiscent of correctly figuring out its shoppers by their actual names.
”A proper set of rules will slightly nurture the (digital forex) market, and we’d welcome that,” Bithumb mentioned in an e-mail reply to questions from Reuters, including that such a code of conduct may add legitimacy to the market.
At present, anybody with a cell phone of their identify and a checking account can enroll and commerce through Bithumb.
The feedback got here a day after bitcoin BTC=BTSP hit a file excessive of $17,270 on the Luxembourg-based Bitstamp change, regardless of questions concerning the cryptocurrency’s actual worth and worries a few harmful bubble.
Although it was the world’s prime operator of digital currencies in November by buying and selling quantity and South Korea is among the many world’s largest bitcoin markets, BTC Korea.Com has maintained a low profile because the launch of Bithumb in 2014 and there’s little public details about it.
Drawn by bitcoin’s explosive surge of greater than 15-fold this yr, bizarre South Koreans from housewives to varsity college students and workplace staff have rushed to mobile-app based mostly digital forex exchanges reminiscent of Bithumb hoping to make a fast revenue, regardless of warnings from the federal government.
After bitcoin costs soared 21 p.c in a single week final month, Prime Minister Lee Nak-yeon mentioned it was time for the federal government to take motion as “some critical pathological phenomenon” may come up if left unchecked.
The finance minister mentioned on Monday that ministries are in talks to resolve whether or not such buying and selling needs to be regulated, whereas the chief of the monetary regulator mentioned some Justice Ministry officers are calling for an outright ban on cryptocurrency buying and selling, though nothing has been determined but by way of regulating the market.
BITCOIN BOOM “IRREVERSIBLE”?
South Korea accounted for 15 p.c of world bitcoin buying and selling up to now 24 hours on exchanges that cost charges, in keeping with Coinmarketcap.com. That’s method above the scale of its financial system at about 2 p.c of world output.
On some days, day by day bitcoin quantity has surpassed that of the nation’s small-cap Kosdaq share index, which has a market worth of 271 trillion gained ($248.6 billion), in keeping with the federal government.
Bithumb has been on the middle of the speculative frenzy. With about 70 p.c of market share in South Korea, it has been the dominant place that bizarre South Koreans go to purchase and promote the digital forex.
Given that almost all of South Korea’s casinos are for visiting foreigners solely, a pent-up urge for food for playing has in all probability performed a component within the bitcoin mania, says Park Nok-sun, a cryptocurrency analyst at NH Funding & Securities.
“The truth that anybody can begin buying and selling with small cash and the shortage of risky betting locations helped the market to go viral in Korea,” Park mentioned.
Headquartered in Seoul’s posh Gangnam district, BTC Korea.Com has disclosed little about its buying and selling platform Bithumb or its founder Kim Dae-shik.
Requested if looming rules would curb the growth, the corporate mentioned “the pattern can be irreversible, and we see cash flowing into the digital forex market from inventory markets.”
Shim Mi-yeon, a 36-year previous Pilates teacher and a Bithumb person in Seoul, says she is just not afraid of rules.
“China imposed some heavy rules however bitcoins nonetheless surged proper? South Korea is a a lot smaller nation and I feel the market can stand up to a regulatory crackdown in the long term,” she mentioned, as she checked the newest costs on her telephone.
The corporate cautions towards speculative habits. In a pop-up message on its web site, Bithumb suggested its clients towards “unreasonable investments” as digital forex buying and selling is just not a market of currencies assured by the federal government.
Kim Yong-beom, vice chairman of the Monetary Service Fee, on Monday described digital forex buying and selling as a “Ponzi” scheme.
“We are going to proceed to ban monetary establishments from coping with cryptocurrency-related merchandise. The rationale why costs go up is as a result of they count on the following particular person to take (the coin) on the value they need, and that actually is a Ponzi scheme.”
Reporting by Cynthia Kim; Further reporting by Dahee Kim; Enhancing by Kim Coghill