Bloomberg reports that South Korea's Financial Services Commission Chairman Choi Jong-ku said in a speech text:
There’s high possibility cryptocurrency transactions could be used in money laundering.
South Korea to suspend virtual account- related operations of banks if they are found to have broken laws related to cryptocurrency.
Regulator also strengthen probe into cryptocurrency exchanges over price manipulation, money laundering, pyramid scheme.
Side effects of cryptocurrency "serious"; regulator will consider all measures including shutdown of cryptocurrency exchanges.
Cryptocurrency fever in S. Korea is much stronger than other countries; regulator won’t let S. Korea take the lead in abnormal cryptocurrency trading.
Per my post from last night, Wall St. is rejoicing this morning on this news as another avenue of inflow into the cryptocurrency markets will be aggressively blocked. This entire market is running on momentum based on capital continuing to flow into the space.
If it does, Wall St. wants its cut. If it doesn't, then it needs to be killed.
So, it's imperative that only corporatist-rentier approved exchanges and funds get the business, not the startups and the entrepreneurs (no matter how shady) who have helped build this industry.
As I said last night:
And, once there, of course, you don't get to buy Bitcoins. No, you can buy a leveraged ETF bet on a Bitcoin Futures contract. It's bad enough that most of these exchanges don't interact with the blockchain at all and the coins you hold there are only held in trust.
Now we have to suffer being twice further removed from the blockchain and actual asset ownership? Really Wall St.?
So, the messaging is very clear here. As this third wave of money moves into the crypto-space Wall St. wants its vig and cutting off avenues of entry means forcing the American money into their synthetic products that they make money on and not the assets themselves.
This is the bad news. The good news is that the regulators are going after this stuff ad hoc and it will ultimately backfire on them. This obvious Wall St. shill piece by Bradley Tusk CEO of Tusk Ventures this morning couldn't make the case clearer:
Absent embracing some form of regulations, the bad guys like Russia and Venezuela (or sham initial coin offerings with no technological value) will drag everyone down.
Concrete steps forward
That's why we need national regulations on crypto assets (a 50-state patchwork approach is a very predictable disaster).
We need to accept it as a new and permanent addition to the financial system.
And then we need to regulate it as such: bank charters, licenses, standards, best practices and reviews.
We have a slew of regulations to ensure that banks, mutual funds, pension funds, insurance companies, mortgage lenders and a host of other financial institutions meet certain standards. Some of those regulations make sense. Others don't. But we all agree we need some structure to provide guidance, direction and ensure good behavior (or at least try to).
The same applies here. The U.S. Treasury Department and the Securities and Exchange Commission should start working on what a national regulatory structure would look like and how it would work and the major players in the industry should eagerly volunteer to help provide ideas, advice, information and feedback.
Take it to the next level
Then it needs to go global.
That's the most ominous thing I've read in a while. And this cause celibre of Wall St. regulation and inviting government corruption, regulatory capture and destruction of all of the potential good that could come from cryptocurrencies was published at Coindesk.
Who are Tusk Ventures? Bing has the answer:
Because without a strong global regulatory environment Tusk Ventures wouldn't have a business model. Welcome to the quislings of the crypto-world.