The South Korean fiasco is unfolding at a breakneck speed. This week it became clear that insider trading by the regulatory officials led to market manipulation which in turn created huge gains for those involved in this trading. The whole affair has its beginning in the decision by the Justice ministry to ban the cryptocurrencies altogether. This announcement actually broke the crypto rush and the prices plunged significantly for Bitcoin and Ripple.
The political and grassroots backlash has forced the Prime Minister’s office in the tight spot where he exclusively denied that the only option was banning the cryptocurrencies. All this was unfolding amid the crash of the coins. But the government-backed from its harsh rhetoric and Chung Ki-Joon, PM’s Economic Policy Coordination head announced last Monday that the government changed its position on digital crypto regulations at 9:40 AM.
The news was forwarded to officials and reporters at 9 AM with the condition that the news can only be broken at 9:40 AM, thus effectively giving both officials and reporters 40 minutes to buy the cryptocurrencies at dipped rates. When the news was announced at 9:40 a.m. the markets jump and the bitcoin alone jumped from 19.07 won to 19.46 won.
This news later broke down press conference was held by Rep. Ha Tae-Keung of South Korean Bareun Party at the National assembly who charged the government with creating this manipulation. There are talks now of targeting the officials who enrich themselves with insider trading by bringing new bill forcing them to expose their crypto assets. [1]
Clearly, anyone who knew that the government has changed its position was going in full to take advantage and they did which led to market manipulation. This is how the government interventions affect the markets invisible hands and create corruption and mishandling. Governments are not monoliths. They are made of people, people with significant vices and greed and they utilize their position in power to accrue as much as possible.
As Francis Bacon once said, “Knowledge is Power”. This dictum clearly demonstrates how the knowledge was used to create further wealth by entitled few. The whole crypto movement was created to break such practices of the governments but they are canny and foxy as ever.
Stay tuned.
Shubham Dwivedi
