Subscribe
E-Paper
By Nam Hyun-woo
Along with the worldwide pros and cons over bitcoin and other cyber currencies, debate over the "new gold" is also heating up in Korea with its trading volume continuing to soar.
According to Bithumb, the largest cryptocurrency exchange in Korea, its trading volume of bitcoin and other digital money reached 2.6 trillion won ($2.3 billion), Aug. 19.
The amount topped the trading volume on Korea's secondary KOSDAQ bourse, which stood at 2.44 trillion won the same day.
The market cap of cryptocurrencies at the exchange reached 180 trillion won, which was 80 percent of that of the KOSDAQ.
As of Sept. 2, the price of bitcoin has hit a record high of nearly $5,000. This is a sharp surge given its price was below $1,000 earlier this year and $300 in 2015. Against this backdrop, more investors are turning their eyes to digital currencies.
Bithumb said that the number of its subscribers more than doubled this year from 370,000 to 870,000 as of last month. Given the market share of the exchange, observers expect more than 1.3 million people are trading cyber currencies through Korean exchanges.
But doubts still linger on cryptocurrencies because of their vulnerability and volatility.
In April, a local exchange called Yapizon suffered a cyber-attack aimed at investors' wallets, costing 5.5 billion won. Two months later, Bithumb was also compromised when information of more than 30,000 subscribers was stolen.
This week, U.S.-based cybersecurity firm FireEye said in a report that it found North Korean hackers had targeted at least three South Korean exchanges to steal cryptocurrencies.
The move comes at a time when international society is enhancing economic sanctions on the reclusive regime, which continues to pursue nuclear and missile programs.
The Korean government's belated response is also generating concern.
The government set up a task force to "control" cybercurrencies about a year ago, but it has yet to come up with any noticeable results except for requiring banks transacting with exchanges to authenticate users.
Watchers point out that the government "indirectly" regulates digital coin trading because it still does not recognize them as legitimate currency.
Currently, digital currency exchanges are not registered as a financial institution, thus they are not subject to regulations.
If they earn the status of financial institutions, it means the government acknowledges digital coins as a legitimate currency. As these do not have price limits, the government may face criticism that it is promoting speculation.
On Sept. 7, a lower court ruled that bitcoins were not a target of confiscation. In the ruling against a 33-year-old, surnamed Ahn, the Suwon District Court turned down the prosecution's demand to confiscate 216 bitcoins, which Ahn received from subscribers of the pornography website he operated.
Both Ahn and the prosecution appealed. The latter claims that bitcoins have value so it is wealth that is subject to confiscation.
The currencies volatility is another woe. Though bitcoin prices have jumped over the past years, the daily volatility is overly high.
This week bitcoin prices plummeted after BTC China, one of the largest China-based exchanges, decided to halt transactions Sept. 30 in line with the Chinese authority's move to regulate cryptocurrencies.
