[DECODED X] Bet my bottom Bitcoin
DECODED X is more than just news.
It’s a weekly brief of critical political and economic events in Korea and their takeaway, created by The Investor staff. Recently, we‘ve added “Startup of the Week” based on demand from investors.
To ensure content quality, DECODED X is offered as a paid service. For details, please contact Monica Lee (firstname.lastname@example.org).
Below are the highlights of the Dec. 29 edition.
BET MY BOTTOM BITCOIN
The Korean government seems to be on a hopeless warpath.
This week, Choi Heung-sik, head of the Financial Supervisory Service, said that he was willing to “make a bet” that the Bitcoin bubble will soon burst.
The comments were accompanied by more government measures to keep prices down.
In addition to disallowing the opening of new virtual accounts for cryptocurrency trading, the government is now going to eliminate all anonymous virtual currency accounts.
The measures are actually not too bad, and experts have told us that they seem quite reasonable, meaning there is really nothing to fear for investors.
It also means that the measures aren’t quite as strong as the government wants.
“It’s almost like the government needs a scapegoat of some kind, almost like there are officials who lost money in the market and now want vengeance. That is the sentiment I am getting from the recent string of measures,” said one source who works closely with one of Korea’s top five cryptocurrency exchanges.
In one aspect, it’s true that the government does have a lot on its plate because lo and behold, Korea has emerged as one of the world’s top markets for cryptocurrency.
Ever since China became scarce, it’s all about Korean investors and exchanges. It’s said to account for one-fifth of the global Bitcoin market.
So what Seoul does will have a massive impact on not just the markets, but the regulatory framework as well.
At the same time, investors find it hard to accept why the government is trying so hard to make prices go down and cool the market when there are lots of success stories.
“It’s not just about those who fail. It’s also about those who have made money, and also those who see some kind of a future in cryptocurrency. It’s also hard to see what’s so different about this compared to legalized gambling, such as race-horsing, which is actually based on even lesser odds,” said one investor who said he would take to the streets this weekend to protest.
The government also doesn’t seem to have much faith in blockchain technology, which after all, forms the essence of cryptocurrency. All any official talks about on air is the prices, and the overheating. Not a word is heard about how it would utilize the precious technology that is being seen as a way to securitize monetary transactions.
Putting in place the right regulations to protect innocent people and the economy is one of the key missions of a government. But many times, such as with the stock exchange, Seoul took missteps and over-regulated everything out of proportion. Here’s hoping it won’t happen, and a Happy New Year at that.
Read on for this week’s DECODED X.
MY STORY: LEE JAE-YONG
We thought about writing a separate segment on the latest appeals trial of Samsung Vice Chairman Lee Jae-yong. Such as that, while the logic that he never had to compete for leadership means he never had to stoop so low as to bribe the president, seems okay, we wonder if there weren’t any others.
We also wondered whether it wasn’t double standards how former president Park Geun-hye is dallying away her time -- refusing everything demanded of her and even trying to get the United Nations to agree that she is suffering in prison -- while the Samsung heir, who may have many faults but has contributed to the Korean economy -- whether through himself or his father and grandfather -- is crying in court.
We suggest you be the judge. Below is the full script of the final statement that Samsung Vice Chairman Lee Jae-yong gave on Dec. 27 at his appeals trial.
Your honor, I sincerely thank all those who are taking part in this trial.
I will start by saying I am the biggest debtor when it comes to Korea. I had the fortune of being born in a good family, and grew up in a privileged environment, receiving exceptional education.
I also enjoyed the privilege of working at a top-notch global company like Samsung, alongside talented and dedicated people. For these opportunities, I have constantly pondered on how I can give back to society.
Over the past 10 months, after meeting people I have never met before and hearing their stories, I have learned that I actually had more than I thought.
Your honor, if I may, I will now tell you my dreams as a corporate leader.
I wanted to be recognized for my abilities, just like my father Lee Kun-hee and grandfather Lee Byung-chull, and dedicate myself to the betterment of our country and share whatever privileges I enjoyed.
Granted, I was born as the third generation in a conglomerate family, but I hoped to add value to Samsung and make it stronger with my efforts and abilities. I really wanted to be recognized as the leader of a top-tier global company.
I am aware all this is up to me, and me only. I simply have to do better.
This also means it’s not something that a president can help achieve. Even in my wildest dreams, I never thought to enlist the support of the president to become recognized as a successful corporate leader. In this regard, I feel wronged (about the bribery accusations), so if I may, I ask the judge to take in consideration my beliefs.
I sought to be recognized as a true leader in society and to my fellow employees. I wanted to be credited for my abilities, for who I am, and as someone who is as capable and as dedicated as my father and grandfather. Also, unlike my father, I am an only son, and unlike the offspring of other conglomerates, I never had to compete to succeed the company.
My beliefs or thoughts on this matter have never wavered, even after my father fell ill. At the risk of sounding arrogant, I was confident of achieving my dreams.
Given all this, why would I try to bribe anyone? I have never in my life considered getting assistance from anyone, and I never did.
I had much on my mind as I prepared this final statement. And as I looked back on the past, it felt like everything had become irreparably messed up. And I am so sorry about it all. I feel quite lost when I think about how I can recover the public’s trust.
I don’t know where to begin, and I have lost many nights’ sleep over how I can solve this mess, and whether there is a solution to it at all.
But one thing is certain.
Your honor, it’s certain that everything is my fault. Everything began from my meeting with the president. It wasn’t something I had volunteered to, but it happened, and that was my fault.
I take full legal and moral responsibility.
And I also ask mercy for the other defendants involved in this case. Please let the punishment fall on myself only. Things can be resolved only once I begin to take responsibility. The people here only did what they had to do for the company. I am not certain if I am allowed to ask such things while I am on trial, but I sincerely hope and wish for your mercy for Choi Gee-sung and Chang Choong-gi.
If legally possible, please let them go, and punish me instead. I will take full responsibility.
EAT YOUR WORDS
Fair Trade Commission chief Kim Sang-jo has been a sweetheart with not just the public, but the media too. He is a well-educated man with a prestigious academic background and good family background to boot.
But recently, there was an incident that was actually quite comic.
Kim had sent out text messages to the entire FTC staff on Dec.27 saying he would create a so-called “Anti-lobbyist Clause,” under which FTC employees would have to report if and when they meet the following three types of people: law firm attorneys, conglomerate executives and former FTC employees who are doing any kind of work related to the agency.
These new regulations were to begin on Jan. 1, 2018.
For himself, Kim was even harsher, saying he would report on it even when he meets people who don’t fall in the above category.
“I promise to stand by what I said,” Kim said. “This is not to keep FTC employees from meeting people from the outside. It’s only to improve transparency. But I know this can cause some inconvenience, so I ask for your understanding. Please support me.”
Well, soon after, he had to eat his words, because of course people found that absurd, especially from a man whose job is to meet people and make sure the FTC wasn’t creating and implementing regulations ignorant of the market situation.
He ended up sending message saying he would observe the rules just like everyone else, and not go overboard.
The Investor finds it hard to believe that a man who has been around the block, and has had access to global standards, can hold such a rigid view on regulations.
STARTUP OF THE WEEK
This week’s startup of the week is Methinks, a company founded in Silicon Valley by former Naver America executives.
Philip Yun is co-founder of the company, and the beauty of Methinks is that it has made researching a much simpler and less costly project.
Granted, research firms and maybe people in related units would lose their jobs, but on the whole, Methinks is finding ways to make the process much more doable for all parties involved.
At about a fraction of what it would take for companies to go out and search, Methinks connects the firms to the “thinkers” – the people who take part in the surveys – much faster and easier.
Technology is of course involved, since Methinks makes it possible to quickly locate the thinkers through apps they use and locations they go to. It then hooks up the clients to the thinkers via video so they can get really “see the picture,” instead of relying on just data or surveys.