The Ministry of Justice raided exchange to find any tax irregularities and also made a press release saying they are recommending the government ban cryptocurrency exchanges because they consider it gambling. They already tried a less stringent recommendation before, but the Korean Parliament voted it down because of constituent pressure. The reason the Ministry of Justice is doing this again is because so much capital is fleeing the Korean stock market and entering cryptocurrency.
When Moon Jai-In became president, there was a lot of expectation for the Kospi and Kosdaq to do well even though he is what Koreans would consider a left wing politician. What they did not expect was the atomic bomb of crypto to explode among the youth and wealthy here. The politicians are getting very confusing signals from the public in how to deal with this because the public is very divided on this issue. The crypto market here is 70% made up of 20-30 year olds who believe this is the future. The very wealthy are seeing unbelievable gains even though they have strong ties to the real estate and stock market. Many others see this as a way of gambling and something that must be banned. All this diverging public outcry is leading to the elections this summer...
In a couple of months, there will be local elections and suddenly politicians find themselves having to take a stance in what is becoming the biggest social, economic issue Korea has faced in a long time. What makes this extremely interesting is that the pressure they feel from the wealthy families here who own the Korean companies is that even though their stocks are suffering, their crypto holdings are far outpacing those losses. Plus the majority of the young vote in Korea is very pro crypto, so they are not sure what stance to take.
If I had to make an educated guess what do I think will happen? They can try to slow it down, but they will have to accept its reality. Right now there is a ban on people making new accounts on the exchanges that is suppose to be lifted at the end of January, but they may try to extend this ban. Eventually they will lift it because the anger from denying the public access to this market will only grow endangering the politicians' careers who are supporting these types of bans. They cannot stop crypto in Korea. It is an overwhelming wave they cannot shore up.