6 out of every 10 Koreans who are investing in crypto for the first time are in their 20s and 30s. 2.5 million accounts were opened across the top four Korean exchanges over the first three months of the year. Korean authorities were concerned as to the risks for these young investors in what they considered a risky sector.
According to an article today in the The Korea Herald, based on a report released by the opposition People Power Party, many young Koreans were attracted to Crypto as opposed to more traditional forms of investment, and this was raising concerns over the risks these young people were now exposed to.
The report cited that of the 1.58 million new account holders, 63.5% were in their 20s to 30s, while 1.5% were teenagers.
Concerns are being voiced in the Korean government over a “potential bubble being formed in the crypto sector” and there were calls to “crack down on illegal transactions and fraud”.
“The recent crypto fad reminds of the Tulip mania in the past as people are passing over a ‘ticking time bomb’ that is imminent to explode anytime soon,” said Lim Jong-in, the dean of the Graduate School of Information Security at Korea University, “When the ticking bomb goes off, no one will be held accountable while those individual young investors could suffer significant losses.”
Another problem for regulation was that many of the tokens and coins made available on exchanges were based overseas, making it very difficult for domestic regulators to ensure their full compliance.
Hacking was also held up as a serious problem. A hack on one of the biggest Korean exchanges, Upbit, was cited. In November 2019, the exchange was hacked to the tune of nearly $50 million in value of cryptocurrency.
Generally, it was seen that the crypto market was in a bubble, and that it was very “overheated”. In light of this, the government has pledged to do whatever it can to investigate any illegal activities related to crypto.
Gu Yoon-cheol, chief of the Office for Government Policy Coordination, stated in a recent press briefing:
“Individuals should make careful decisions related to cryptocurrencies as crypto assets, which have no intrinsic value, are used as means of speculation rather than investment,”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.