$300 billion evaporated in ten days, is a regulatory storm coming between China and South Korea?

The cryptocurrency market lost more than $300 billion in ten days.

According to coinmarketcap, the current total market value of the encrypted digital currency market is more than 500 billion US dollars. This figure reached more than 800 billion US dollars on January 10, ten days ago. This is the peak of the total market value of digital currencies since the birth of Bitcoin.

Source: coinmarketcap

The week-long plunge is considered to be the resurgence of the regulatory storm. The regulatory centers speculated by various opinions mainly come from the Chinese and Korean markets. The Korean market is one of the regions that has emerged in this round of surge. The enthusiasm for encrypted digital currency is reflected in many aspects: it has long led the global market; it accounts for about one-fifth of the total global encrypted digital currency transactions; the number of people using digital currency trading programs has increased 14 times in 11 weeks.

South Korea: The beginning of a decline

The regulation caused by excessive speculation in the Korean market caused the beginning of this round of decline. On January 12, the Minister of Justice of South Korea said that the government was drafting a bill to ban cryptocurrency trading, causing the global digital currency market to fall by more than 10%. However, this move was later proved to be a lie, and caused more than 200,000 Koreans to petition for the removal of the Minister of Justice. The government then re-discussed the new cryptocurrency regulations, and the Bank of Korea also abandoned its decision to stop providing cryptocurrency account services.

However, the strict regulation of South Korea's cryptocurrency market has not been relaxed. South Korean regulators announced that cryptocurrency traders must complete real-name authentication this month. At the same time, the government requires six major banks to deploy a new real-name system regardless of whether they decide to continue serving cryptocurrency exchanges.

China: Strict rectification

Since China closed its digital currency trading platform in September last year, the National Internet Financial Risk Analysis Technology Platform has found that with the cleanup of domestic ICO and Bitcoin trading in early September, over-the-counter trading has once again flourished, and Bitcoin over-the-counter trading platforms have been accelerated since October.

According to a 21st Century Business Herald reporter who learned from people from multiple token trading platforms, the regulators recently released a signal in a special work briefing on the rectification of Internet financial risks that they will continue to strictly rectify the "going overseas" and "over-the-counter trading" activities of digital asset token platforms such as Bitcoin and Ethereum. The intensive arrival of the above-mentioned rectification measures may mean that the current cleanup and rectification of token issuance and trading has entered a new 2.0 moment. "The regulators are very determined to rectify ICO and token trading." The above-mentioned Internet finance platform personnel also analyzed that "in the short term, it is not ruled out that clearer rectification measures for ICO and tokens will be implemented."

Many domestic token trading platforms have taken the initiative to shut down their sites

Along with various speculations, many platforms have already taken practical actions. At 20:00 on January 16, Bixin’s official Weibo account released an announcement that the OTC function would be temporarily closed, and all other functions would be used normally. Bixin staff said that this was Bixin’s initiative to close the function.

At the same time, many token trading platforms issued closure notices. On the evening of January 16, Yuanbao.com issued an "Announcement on the Safe Handling of Users' Stranded RMB Assets", and then issued an announcement to completely terminate operations and close the website in the near future.

Guibit (guibit.com) issued a notice to remove all coins on the evening of January 16, informing users to withdraw all digital currencies before 6 pm on January 20. On January 17, Lianhang (lhang.com) also issued an announcement to stop all business, informing users that all withdrawal functions will be closed from 14:00 on January 20.

Although no definite regulatory policy news has been released yet, according to the "Announcement on Preventing Risks of Token Issuance and Financing" issued on September 4, the People's Bank of China, the Central Cyberspace Affairs Commission, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission, etc., it is a further implementation of the requirements of the announcement if the trading platform is completely shut down. Whether there will be another round of rectification is still unknown.

However, looking at the cryptocurrency market in the past month, air coins have been hyped up and a large number of newcomers have entered the market without knowing the truth. The over-speculative market has done more harm than good to the development of blockchain itself, and cooling down the market may not be a bad thing.

As of press time, the market has shown signs of recovery, which also reflects the return of investor confidence. According to coinmarketcap, mainstream currencies have all seen varying degrees of increase, with Bitcoin currently priced at $11,895. In the past 24 hours, the price change has changed from a 20% drop in the previous trading day to a 7.43% increase.