October 2018 has been a significant month for South Korean Won (KRW) cryptocurrency marking a 50-percent increase in the market share of this APEC country.
KRW’s extended run in October is a far away story from the initial months of 2018 when the trading volume of this domestic coin tanked in June and even entered a contracted stage, before trending upwards in October. The phase between June and September saw a maximum contraction in terms of trading volume.
Shrinking Phase triggered by Hacks
For the domestic coin of South Korea, its worst nightmare came about in the middle of 2018. KRW trading volume came about because of the hacks which came through in virtual currency exchanges.
Two key exchanges in the country, Coinrail as well as Bithumb were cyber-attacked leading to the loss of millions of cryptos. The knee-jerk reaction of these two exchanges was to freeze all withdrawals and deposits thereby impacting trading at these exchanges severely. This immediately impacted the local volume, on Bithumb since it was a local exchange.
KRW riding stock market turbulence
Analysts are interpreting the latest KRW turnaround story to the troubled times in stock markets. Investors are finding Bitcoin interesting and are beginning to be more stable over fiat currencies or other assets.
The South Korean government has been equally proactive about cryptos and continues to recognize virtual currency exchanges on par with legal institutions of fiat-currencies.
The only issue in this positive ecosystem is the continued ban on ICO by the country’s fin regulators. The Chairman of the FSC has reiterated before the Parliament that prohibition orders on ICOs would remain for a longer period. The Initial Coin Offerings (ICOs) are typically a fund seeking instrument and is a document which specifies the technology on which the proposed token is built, it life-cycle, block commitments and more. However, it does not offer any type of security of ownership or stake like the Initial Public Offering (IPO) used by fiat currency funded companies looking for funds and further expansion.
The south Korean crypto community has been demanding that the regulatory body reverse its ban on the ICO, but the government has been refusing, on the back of the higher risks.