How to suppress Bitcoin trading amid South Korean market frenzy?

In recent years, the rapid development of digital currencies has attracted global attention, and Bitcoin, as the most representative cryptocurrency, has attracted the attention of countless investors due to its market fluctuations. However, in this market frenzy, the South Korean government has taken a series of measures to suppress Bitcoin transactions in order to maintain the stability of the financial market and the safety of investors. This phenomenon not only reflects South Korea's attitude towards digital currencies, but also reveals the challenges and choices faced by countries when facing emerging markets.

First, South Korea's Bitcoin trading market has experienced rapid development in 2017. According to data, South Korea's Bitcoin trading volume once accounted for nearly 20% of the global trading volume. This phenomenon has attracted great attention from the government. As more and more investors poured in, the irrational prosperity of the market began to reveal its hidden dangers. Large-scale speculation has caused Bitcoin prices to soar, but it is also accompanied by huge risks. In order to prevent the further expansion of the market bubble, the South Korean government introduced a series of policies at the end of 2017 to regulate digital currency transactions.

At the same time, the South Korean government has also strengthened its supervision of exchanges. In order to maintain market stability, the government has conducted strict reviews of exchanges' capital adequacy ratios, trading processes, and security measures. This series of regulatory measures has put many small exchanges under tremendous pressure to survive. In 2018, some non-compliant exchanges in South Korea were forced to close, and market consolidation was inevitable. Although this rectification has caused market fluctuations in the short term, in the long run it will help improve the standardization and transparency of the entire industry.

In addition to the suppression at the policy level, the attitude of Korean society towards Bitcoin is also quietly changing. In the early days, many people saw Bitcoin as an opportunity to make huge profits, and even formed a trend of "following the trend" investment. However, with the sharp fluctuations in the market, more and more investors began to realize the risks of Bitcoin trading and chose to withdraw their funds. According to survey data, the number of Bitcoin holders in South Korea dropped sharply in 2019, a phenomenon that reflects the gradual weakening of investors' confidence in the market. The market's frenzy was gradually replaced by rationality, and investors began to pay more attention to the security and stability of assets.

In addition, Bitcoin trading in South Korea also faces competitive pressure from the international market. With the rise of digital currencies around the world, many countries have introduced their own regulatory policies in an attempt to attract more investors and capital inflows. In contrast, South Korea's tightening of policies may lead to a relative shrinkage of its market. Many investors have turned their attention to exchanges in other countries, especially in some regions with relatively loose regulations, where investor enthusiasm remains high. This has challenged South Korea's position in the global digital currency market and gradually reduced market activity.

Against this backdrop, the South Korean government has also begun to reflect on its own regulatory strategy. In order to adapt to the rapidly changing market environment, the government has gradually realized that simple suppression cannot solve the problem, but may lead to further differentiation of the market. As a result, the government began to explore cooperation with the industry, trying to understand the real needs of the market by establishing a good communication mechanism. In 2020, the South Korean government cooperated with a number of exchanges to study how to promote the healthy development of digital currencies while protecting investors. This shift marks the gradual maturity of South Korea's thinking on digital currency regulation.

However, despite the suppression measures taken by South Korea on Bitcoin transactions, the market demand still exists. Many investors still have high expectations for Bitcoin and believe that its future development potential cannot be underestimated. Especially in the context of increasing global economic uncertainty, more and more people are beginning to view Bitcoin as a kind of "digital gold" as an investment tool to combat inflation. Therefore, how to balance the relationship between market demand and regulatory policies while suppressing Bitcoin transactions has become an urgent problem to be solved.

In my personal observation, I think that although South Korea's regulatory strategy on Bitcoin transactions is reasonable, it should also be more flexible. While protecting investors, the government can try to guide the market in a healthier and more stable direction. For example, it can launch some innovative financial products, allow compliant digital currency exchanges to conduct more business, and attract more investors to participate. At the same time, the government can also strengthen investor education, improve the public's awareness of digital currencies, and help them better understand market risks.

In general, South Korea has taken measures to suppress Bitcoin transactions amid the market frenzy. This decision is both a response to market risks and a reflection on future development. As the global digital currency market continues to evolve, the choices made by various countries in regulatory policies will affect the direction of the entire industry. As an important digital currency market, how South Korea finds a balance between regulation and innovation will be the key to its future development.

In this era full of challenges and opportunities, the future of digital currency is still full of uncertainty, but it is certain that only through reasonable supervision and the joint efforts of the market can the sustainable development of digital currency be achieved. It is hoped that South Korea can continuously improve its own regulatory system in the process of suppressing Bitcoin transactions, protect investors, and promote the healthy development of the digital currency market. For investors, rational investment and risk control are still the key to success. In this ever-changing market, staying calm and rational is the best strategy to cope with future challenges.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

South Korea will require people who trade bitcoin and other virtual currencies to do so under their real names as part of a drive to curb speculative activity, the government said on Thursday.
Bitcoin, the best-known virtual currency, has been on a wildly erratic bull run over the past few months. The price of a bitcoin started the year around $1,000 and surpassed $19,000 earlier this month, leading ordinary savers around the world to pile into a largely unregulated and highly volatile investment.
But nowhere has the craze for virtual currencies been as intense as in South Korea, or as sudden as in the United States.
Until recently, markets for bitcoin and its rivals barely existed in the country. But a surge in interest has drawn ordinary people, from students to retirees. Trading has become so popular that some South Korean exchanges have set up physical storefronts where laypeople can learn more about the process, requiring real names to trade, bringing virtual currencies like bitcoin more in line with other financial products in South Korea. While bitcoin has shed some of its associations with payments for illegal activity, Thursday's real-name policy could also make it easier for the South Korean government to track transactions and collect taxes from virtual currency investments. Bitcoin prices plunged after the announcement.
"Cryptocurrency speculation is irrationally overheated in South Korea," the government said in a statement, adding that officials would discuss further potential moves to curb speculative trading, such as shutting down some exchanges. "The government cannot allow this abnormal speculative situation to continue." Authorities have taken other steps to control the market. Last September, South Korea's financial regulator banned initial coin offerings, a way for startups and online projects to raise funds by creating and selling their own virtual currencies.
Government officials, including Prime Minister Lee Yong-yeon, have made no secret of their concerns about investor frenzy.
“It could lead to serious distortions or social pathologies if they are not addressed,” Mr. Lee said after a cabinet meeting in November. Most virtual currency exchanges in China can already verify customers’ identities via mobile phones, said Kim Jin-hwa, head of an industry association involved in virtual currencies and other blockchain technology applications in South Korea. The exchanges are also working with banks to develop new measures to ensure transparency, Mr. Kim said.
Lee Kook-bo, chairman of the Korea Fintech Industry Association, said the government was more interested in warning investors about a potentially overheated market.
Mr. Lee, who is not related to the prime minister, said he believed the government had been hoping to cool speculative enthusiasm simply by discussing tighter regulation, rather than actually enforcing too many rules. Mr. Lee said officials were concerned that more regulation would give virtual currencies greater legitimacy in the eyes of the public and increase trading activity.
“The government is really tricky,” Mr. Li said. “They’re worried about giving people a wrong perception.”

The first step taken by the South Korean government was to restrict anonymous transactions. Previously, many investors traded Bitcoin through anonymous accounts, which not only increased the risk of market speculation, but also provided opportunities for illegal activities such as money laundering. Therefore, the government requires all exchanges to implement a real-name system to ensure the transparency of investors' identity information. Once this policy was introduced, it triggered widespread discussion. Some people believe that the real-name system can effectively combat illegal activities and protect ordinary investors; while others worry that this may lead to the violation of investors' privacy, which in turn affects the market's activity.