[DECODED X] Crypocurrency crash
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. To ensure content quality, DECODED X will soon be offered as a paid service. For details, please contact Monica Lee (firstname.lastname@example.org).
For now, see below for the highlights of the Jan.12 edition.
If a cryptocurrency crash is in the making, it’s not just because the so-called “Kimchi Premium” was so precariously large and risky, but also because of the government.
Seoul appears to be almost in a frenzy in trying to curb what it calls the “cryptocurrency craze.”
The minister of justice on Jan. 11 went so far as to say that he would not “deign” to call Bitcoin a currency, but at most, it was a “crypto token.”
He also said that if things don’t improve soon, the government could shut down exchanges. When asked about the losses people may incur, he said the government had given out enough warnings for them to know better.
It was not really just what the man said that irked everyone -- about one out of every 23 Koreans to be more exact -- but the way he said it, as if he were talking to a bunch of irresponsible kids, and also the fact that the ministry actually has no legal ground to shut anything down.
In the end, the presidential office had to step in, issuing a formal statement that there were no plans underway for closing down cryptocurrency exchanges without warrant.
Being concerned is one thing, but putting a stop to business transactions that could impact a very large number of people is another.
The Korean economy has always been government-driven, and once again, it is trying to intervene to keep a lid on things, and make sure everything is regulated.
What we don’t understand is why it can’t take a step back and let the markets do what needs to be done.
Prices can’t go up forever. At one point or another, a correction HAS to happen.
So far, all that the government has achieved is to cause prices to dip whenever it issues a new threat, giving investors a chance to buy more to ultimately push prices right back up to where they were before.
Granted, right now, prices aren’t as high, but they have been inching up after the Blue House said it wasn’t considering shutdowns.
Private sector people like JP Morgan CEO Jamie Dimon recanting their words is another matter. The government should be different, and above all, it should at least be in sync with other departments.
Let the markets do their job.
As for the government, it really has it easy. Just collect the taxes and relax.
Read on for the highlights of this week’s DECODED X.
SAMSUNG WOOING VOLKSWAGEN?
Samsung Electronics may be supplying its chips to Volkswagen, according to our sources.
In 2017, Samsung signed to supply Audi with Exynos processors for its car infotainment system, and since then, it’s been sniffing around for opportunities to supply more.
Since VW is a part of the Volkswagen Group with Audi, not to mention the world’s largest carmaker, it makes perfect sense for Samsung to start supplying to VW, don’t you think?