South Korean financial regulator and watchdog Financial Supervisory Service (FSS) has no intentions to regulate Bitcoin exchanges for now according to a Thursday announcement by the department’s chief.
Korea Times reported that he said cryptocurrency is not a “legitimate currency” so does not fall within regulation and supervision. He said the government sees them as ‘subjects of speculation’ instead.
“Though we are monitoring the practice of cryptocurrency trading, we don’t have plans right now to directly supervise exchanges. Supervision will come only after the legal recognition of digital tokens as a legitimate currency”.
But that does not rule out possibilities, he said,
“Supervision will only come after the legal recognition of digital tokens as a legitimate currency,” he said.
South Korea banned ICOs in September after China.
The statement comes in the wake of concerns of an outage that causing a server failure in Seoul-based Bithumb, which caused many disgruntling customers to ask that legal be taking against the company. Customers claim losing hundreds of millions in the one-and-half hour malfunction.
Bithumb said in a statement that the 24-hour trading volume leading to the outage was 800%-900% to that of October’s average and the number of website users grew by 1600-1700% compared to the previous day’s average and internet connections shot up to 3 Gbps in bandwidth or over 500 percent increase from previous average. The unprecedented traffic crippled servers, akin to a DDos attack.
About 31,000 users Bithumb customers also suffered losses, including stealing of their data, owing to a data breach in a separate attack incidence.
It is really bad news as Bithumb is world’s largest cryptocurrency exchange by trading volume. Digital token trading in Korea is around 2 trillion won ($1.4 billion) worth.