[Photo: Bitcoin & South Korean flag. Source: ccn.com]
It turns out that the market crash of the past few days, starting on the 15th, was known in advance by employees of South Korea’s Financial Supervisory Service (FSC); an organization similar to the American SEC (Securities and Exchanges Commission). They knew that there was going to be a statement about their government planning on regulation. This then prompted many of the said employees, dumping their crypto assets right before the crash.
The FSC Director, went ahead to admit that several officials within the agency committed insider trading.
Therefore, this proves that the South Korean officials had most likely planned this well ahead of time and wanted to cash in on an unregulated crypto currency trading market.
The fact that there is no known law against insider trading, makes it hard to prosecute the culprits.
South Korea’s Fair Trade Commission later admitted that it was impossible to shut down cryptocurrency exchanges in the country.
Why?
Because there is no law set up in South Korea to deal with cryptocurrencies. None at all! This is uncharted territory similar to landing on another Planet in our Galaxy system.
It is such news that can anger a private cryptocurrency trader who has probably put in a large chunk of his savings in cryptocurrencies hoping to cash in on the rise and popularity of blockchain technology.
I had written an earlier article that put forward the idea that the South Korean government was up to no good.
In simple terms, we have been taken for a ride and are not happy!
Personally, I feel like flying over there and slapping a few officials! Or even issuing Stone Cold Stunners! Luckily, I can ‘Woosah’ out of it through meditation and my regular jogging schedule.
The worst to be hit by this news was the Bitconnect coin that lost 90% of its value leading the Bitconnect exchange to shut down indefinitely. The Bitconnet coin had reached highs of $437 only for the S. Korea news to send it down to $26. This left many investors angry, confused, disheartened and even outright shocked.
So how can we prevent similar panic selling due to the domino effect of a planned untrue statement from South Korea?
Firstly, we need to be a bit selfish and treat every news that comes out of their government officials as ‘fake news’. I know it is extreme, but these guys are toying with our financial investments. Every comment made by any S. Korean official should be carefully scrutinized and treated as FUD meant to cause a panic sell. Traders in the various exchanges should be advised to HODL on to their coins en masse in a show of defiance to South Korean officials.
Secondly, this might be a situation where South Koreans will have to compromise the freedom that cryptocurrency gives, by accepting some sort of legislation to be drafted and approved. Such laws would punish insider trading with steep jail times, fines or even life long banning from trading in crypto currencies and even regular stocks.
We all hate regulation, but this will be a necessary evil to prevent some situations like traders who suffered losses, contemplating even suicide. Most of such cases are traders who had taken out second mortgages on their houses or even taken out bank loans in the hopes of making quick profits.
Thirdly, we need to take to heart what Mark Cuban had said when he advised that cryptocurrency investors should only use the money they are comfortable in losing, to buy bitcoin and other coins of their choice.
Cryptocurrency investing is new and risky business. We need to be aware of the volatility of the market and plan appropriately.
The best plan is probably to heed Cuban’s advice and buy with only the cash you are comfortable of losing.
A second option is to be a day trader and cash out regularly.
A third, and insane option, is probably to go all in and hope this madness of market manipulation is curtailed. The only way this can happen is if more and more individuals buy cryptocurrencies. This way, any news from South Korea or China will not affect the market in any observable way. Any news coming from that side of the globe, will not cause a Tsunami of panic selling for their market share will be minimal with respect to the rest of the world.
Therefore, join me in preaching the Gospel of Crypto to the world and have more and more people joining the digital currency community.
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View Comments (2)
The Bitconnect shutdown was not related to the news from Korea. It was due to receiving several cease and desist letters from multiple state financial regulators, they are being accused of being a Ponzi scheme.
It could be both.