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After clamping down on domestic trading of cryptocurrencies, China is looking to do the same to international crypto trading by its citizens. In other words, the government there plans to restrict its citizens from trading in cryptocurrencies at overseas exchanges or participating in initial coin offerings held abroad. While exact figures are unavailable, the ban does not seem to have had a significant effect on trading. Domestic customers began trading on the new exchanges by using virtual private networks VPNs that enabled them to bypass government-controlled gateways and connect to exchanges in Hong Kong, Japan and South Korea.

All three locations regularly account for the largest trading volumes for cryptocurrencies. In fact, Hong Kong-based Binance has emerged as one of the top three exchanges in the world by trading volume. While exact figures related to trading by Chinese citizens are unavailable, the government-controlled publication provided an indicator of the extent of the problem. South Korea is said to be considering regulation even as Japan is tightening the leash on exchange operations following the Coincheck hack.

China exerts a significant influence on bitcoin prices through its plethora of trading operations and miners. Cryptocurrency markets have reacted to the threat of increased regulation with a prolonged slump. Investing in cryptocurrencies and other Initial Coin Offerings "ICOs" is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs.

Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

As of the date this article was written, the author owns small amounts of bitcoin. Your Money. Personal Finance. Your Practice. Popular Courses. Login Newsletters. News Markets News. Compare Investment Accounts.

The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Articles. Partner Links. Related Terms Coincheck Coincheck is a Tokyo-based cryptocurrency exchange and digital wallet founded in Circle Financial Services Company Circle is a financial services company that makes products using blockchain technology. Uphold Uphold is a cloud-based digital currency exchange and platform.

Bitcoin Definition Bitcoin is a digital or virtual currency created in that uses peer-to-peer technology to facilitate instant payments. It follows the ideas set out in a whitepaper by the mysterious Satoshi Nakamoto, whose true identity has yet to be verified.

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Or utilizing currency easily. This is the case of China and South Korea. Both countries and their citizens are no strangers to the thought of ditching fiat in favor of crypto. Both of these markets could, arguably, be the most significant reason why cryptocurrencies are popular nowadays. In terms of adoption of cryptocurrencies South Korea boasts an impressive 3 million people owning digital coins.

A Bump in the Road to Korea

In exchage recent visit to China, South Korea's finance minister Kim Dong-yeon reaffirmed support for blockchain technology and cryptocurrency, reports Chnia to Z Forex. Exchagne minister stated that "blockchain technology can disrupt and revolutionize the world The sentiment was soon echoed on xhina other side of the world by US regulators. At the same time, the South China Morning Post reports that authorities are aiming to stamp out the anc market entirely and block all websites related cryltocurrency crypto trading and ICOs.

All cryptocurrehcy these statements suggest a strong stance against China's ongoing attempts to crack down on cryptocurrencies. Many South Korean and Chinese companies have already been working together on cryptocurrency developments. The inherent decentralisation of distributed ledger technology means that international cooperation might be a necessary step towards effective regulation of cryptocurrencies.

This was previously noted in China where early attempts at snd local cryptocurrency trading simply saw people take their business offshore. And in the case of that particular ban, South Korea was one of the preferred offshore trading destinations. At the time of writing, China is reportedly in the middle of another attempted crypto crackdown, this time with the apparent intention of making it. At the same time, Korea's finance minister has said that China and Korea are better off being on the same page and he has reiterated that South Korea still has no crypttocurrency to ban or unduly restrict cryptocurrency.

There have been several previous rumours of crypto crackdowns in Korea, which may have significantly impacted prices. Rumours circulated in late December that exchanges would be closing cryptocurrrency Januarythen apparently it slipped people's minds and they started panicking again when January rolled.

After a few market drops and some light civil unrestSouth Korea's FTC chair clarified that shutting down all exchanges was "unrealistic" and was simply not going to be happening. Cjina, this crackdown has manifested as a requirement that people use their real names when trading won for crypto on South Korean exchanges. You might recognise this as the bare minimum China and korean cryptocurrency exchange requirement that has been implemented by most countries, including Australia.

Similar cryptocurrency ban rumours have circulated about India, much to the surprise of everyone in India. While the rumours of a cryptocurrency kibosh in China are looking a lot more real than the rumours elsewhere, Korea's stance is now very clear.

Cooperation between the two countries might be at odds with the hard crackdown in China that some fear. This speaks to exchangee potential difference cina opinion between China's intended exchante of blockchain technology and the way it's going. The crypto crackdowns in China aren't aimed at the technology. Instead, they're focused on cryptocurrency trading. It's the exchanges that are being targeted rather than cihna coins themselves.

Kim makes ajd point that the trading element cannot necessarily be separated from the technology, and that getting the full benefits means having. The question of whether cryptocurrencies are really necessary for distributed ledger technology is still a long-running debate, despite having already been conclusively resolved as "it depends".

You don't need a token model to use distributed ledger technology but you can't get the full benefits by shutting it off entirely, especially if you want the benefits of a properly decentralised network. At the end of the day, there's a clear competitive advantage for both businesses and governments in keeping all the options koreah the table.

A certain amount of regulation is essential for innovation and growthbut hard crackdowns and outright bans seem more likely to end up as a handicap that no country wants to deal with, especially if it puts them at odds with their neighbours. Click here to cancel reply.

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Andrew Munro. Statements from Korea's finance minister suggest that China's attempted cryptocurrency ban may not. During his visit, Kim reportedly met with Zhou Xiaochuan, the governor of the Central Chinese Bank, and said that: The two countries need to cooperate more closely on blockchain technology. South Korea has no intention of cracking down on cryptocurrency.

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It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks — they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.

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About Author

Cryptocurrency markets have reacted to the threat of increased regulation with a prolonged slump. His interests lie in Bitcoin here, open-source systems, network effects and the intersection between economics and cryptography. During that time they were hacked for over 3, bitcoins. However, this has not slowed down Coinone. The local cryptocurrency industry has been bracing for heavy-handed regulations ever since the government first proposed to ban ICOs last September. Bithumb has long been the largest crypto exchange in South Korea by volume. They are previously operated by Yapizon. However, the news outlet elaborated:.

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