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Embargo gave inside info on bitcoin, says rep

Jan 20,2018
An opposition lawmaker Friday blasted the government for putting an embargo on an announcement about bitcoin regulations Monday - giving reporters and officials 40 minutes to snap up cryptocurrencies.

Rep. Ha Tae-keung of the Bareun Party held a press conference at the National Assembly to assail the government’s action last Monday, when the government backtracked from a previous position that it would shut down digital currency exchanges, sending the prices of cryptocurrency to rise.

“The government informed reporters at 9 a.m. last Monday of its impending announcement with an embargo attached, which was lifted at 9:40 a.m.,” said the two-term lawmaker.

Anyone who knew the government would ease its stance on digital currencies could anticipate a rally and buy before it took off.

Chung Ki-joon, head of the Prime Minister’s Economic Policy Coordination, announced the government’s changed position on digital currency regulations at 9:40 a.m. on Monday, saying the government would not shut down cryptocurrency trading.

“The decision on whether to shut down the cryptocurrency exchanges will be decided after much discussion and coordination within the government,” he said, a much softer stance than that of Justice Minister Park Sang-ki, who said four days earlier that all government agencies involved in the matter agreed with the shutting down of exchanges, causing digital currency prices to nosedive.

“After the government sent text messages informing reporters of the impending announcement [which was not disclosed to the public], the market began to rally. When the press began reporting the announcement at 9:40 a.m. it already had reached a high price point,” said the lawmaker.

“It is common sense that public officials should be kept from information that would affect people’s assets until an official announcement,” stressed Ha, demanding those who planned and approved the embargo decision should be held accountable.

Bitcoin was being traded at 19.1 million won ($17,954) at 9 a.m. on Monday, 40 minutes before the government’s announcement and the time of the release of the embargoed release. At 9:40, shortly before the embargo ended, the price had risen to 19.46 million won.

At 10 a.m., 20 minutes after the release, the price of bitcoin was 19.9 million won, according to Bithumb, Korea’s largest cryptocurrency exchange.

Ha’s allegation on Friday adds another twist to the Moon Jae-in government’s clumsy efforts to rein in the local digital currency market, which has grown to be the world’s third largest after the United States and Japan.

Just a day earlier, it was revealed that an official from the Financial Supervisory Service sold his or her cryptocurrencies before a Dec. 13 announcement banning teenagers from trading bitcoin. He or she sold on Dec. 11.


BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]