Carnage In Crypto Land: South Korea Threat To Shutter Exchanges Sparks Renewed Selloff

One of the central tenets of the Bitcoin bull thesis (and the bull thesis around cryptocurrencies in general) is the idea that the space is largely immune to government crackdowns. After all, what good is an anonymous, decentralized system if the powers that be can simply regulate it out of existence?

Government interference in cryptocurrencies is something of a bitter-sweet proposition for crypto bulls. It all at once validates and invalidates the underlying thesis. Government intervention “proves” the need for a means of exchange that’s outside of government control, but successful government intervention also “proves” that the effort to create a viable means of exchange that challenges central banks’ monopoly on currencies was doomed from the word go.

As such, news like what we got out of South Korea on Thursday creates a palpable sense of cognitive dissonance in the crypto community. Overnight, South Korea said it’s considering shuttering at least some cryptocurrency exchanges as part of an effort to do away with what some see as dangerous speculation.

“South Korea has been ground zero for a global surge in interest in bitcoin and other digital currencies as prices surged this year,” Bloomberg writes, adding that “while there’s no immediate indication Asia’s No. 4 economy will shutter exchanges that have accounted by some measures for more than a fifth of global trading, the news is a warning as regulators the world over express concerns about private digital currencies.”

Here are the bullet points from a statement by the Office for Government Policy Coordination: