In this issue, we find that South Korea has decided to follow the steps of China in banning ICOs in an attempt to cut down to the massive amounts of related fraud, give you an update on what’s going on with disgraced MtGOX CEO Mark Karpeles, and recount the troubles that bitcoin-related companies will always run in to when trying to get their stock listed on a major market.
South Korea Now Also Considering Statewide Ban on ICOs
Following the moves of neighboring country and major trading partner China, the South Korean government Financial Services Commission regulators released a statement early last week warning that fund raising through the sales of digital tokens (essential ICOs) would soon be banned, which comes on the tails of news that North Korea had been stealing bitcoin from South Korea in order to fund Kim Jong-un’s regime. Regulators also noted the high potential for fraudulence in unregulated financial products such as ICOs, having learned from evidence produced by China. They also warned there may be further restrictions placed on cryptocurrency usage in general in the upcoming months.
Much like with China, government clampdowns on ICOs do not necessarily translate to a banning of usage of bitcoin in South Korea. As a matter of fact, South Koreans are some of the most frequent users of bitcoin. They also tend to run with the top of the pack when it comes to cryptocurrency mining, devoting astonishing amounts of electricity to the mining of a wide variety of highly successful cryptocurrencies. Currently, South Koreans are buying sizeable amounts of Ripple (XRP), Ethereum (ETH), and in September managed to overtake China as the world’s 3rd biggest bitcoin (BTC) market.
The announcement of plans for tighter regulations by the world’s third biggest BTC market lead to something of a shakeup in price activity, though it was not long lived, and the price of bitcoin is now currently higher than it was pre-announcement, hovering in the $4300 range (as of the writing of this article). All signs point to Wall Street as once again being the buoying force behind the price of bitcoin afloat. In the dark days of 2013, during the collapse of MtGOX (and subsequent collapse of BTC price), there was no sizeable institutional money rushing in to prevent the price from collapsing 23% in just a few days’ time, and over 75% by a year and a half later.
The Ongoing Trials of Mark Karpeles, MtGOX, and Their Angry Investors
MtGOX’s brutal tarnishing of bitcoin’s reputation in 2013 – from which it has still not fully recovered – is finally being addressed, and its perpetrators punished. A recent court decision coming out of Japan ordered that some victims who had lost substantial amounts of coins during the hacking/swindle incident were entitled to compensation by ex-CEO Mark Karpeles. Karpeles, who has been detained in Japan for the last few years, currently faces multiple charges of theft and embezzlement associated with the bankruptcy of MtGOX, which thanks to this year’s massive price boost in bitcoin, operates once again as a solvent company.
Though Karpeles maintains his innocence, the courts could still decide otherwise and are currently considering a lawsuit that would reimburse claimants who had filed losses as a result of MtGOX’s collapse. Many are still dissatisfied with the outcome of the court’s decisions but for the most part, the bitcoin community is happy to finally finish the closing chapter of the MtGOX scandal. In the wake of the heinous actions of Mr. Karpeles, Japan has made comprehensive reforms to legislation involving the handling of digital currencies which has actually helped Japan become perhaps the most bitcoin friendly nation on the planet.
SEC Just Too Much for Bitcoin NYSE Stock Listing
In the United States, bitcoin had a minor setback as well this week as the NYSE withdrew an application to register a bitcoin-based investment security, that would have been on behalf of to be listed on the New York Stock Exchange. Citing inabilities to achieve compliance and establish proper accordance with the registry requirements for issuing a NYSE-based bitcoin industry security, the CEO of Grayscale Investments’ Bitcoin Investment Trust stated he did not “believe there have been enough regulatory developments to prompt the SEC to approve the … application.” The trust still plans to work with regulators to develop a compromise in the near future.
Also in the News
- DJ Khaled is the newest celebrity to endorse a crypto debit card, following in the footsteps of flashy celebrity personalities Paris Hilton and Floyd Mayweather. The promotional agency which hired him to promote the debit card ICO also happens to be the same one that signed both Hilton and Mayweather. Celebrity endorsement of cryptocurrency-related products was virtually nonexistent before 2015 and Mike Tyson’s line of bitcoin ATM machines, but is expected to increase exponentially in the foreseeable future.
- Chinese gangland boss Wan Kuok-koi, who runs a notorious crime syndicate that operates mainly out of Macau, announced plans for a $500 million casino-related ICO. Macau is considered the largest gambling hub in the world and the stateless nature of the independently-governed territory makes it an ideal place to launch an ICO of this nature.