After ICOs, South Korea Now Bans Trading Bitcoin Futures
In a highly unexpected and unanticipated move, one of the Asia’s biggest Bitcoin trading markets - South Korea - has announced to ban trading in bitcoin futures contracts. This is the second major decision taken by the country after banning of ICOs earlier this year in September 2017.
South Korea is considered as the hotbed and a dominant marketplace contributing to Bitcoin trading activities. However, instead, in a surprising move, the Financial Services Commission of South Korea issued a directive asking securities and brokerage firms to withdraw all plans for the trading of Bitcoin futures derivatives. The reason issued behind such a decision is that the commission and authorities don’t consider Bitcoin to be an underlying asset of derivate product. Hence, Bitcoin cannot remain as the subject of futures trading.
With all the euphoria around Bitcoin futures contracts in the global Bitcoin markets, several security brokers in South Korea geared up their plans to offer its client to trade in Bitcoin futures. But soon following the directive of the ban, the exchanges have forfeited their plans and halted any further progress in this direction. As per the reports from Korean Herald, Korean brokers like Shinhan Financial Investment and eBest Investment and Securities have canceled their pre-planned seminars on Bitcoin futures.
There is no doubt that this ban has certainly left many investors and brokerage firms disappointed to an extent. An official from the securities industry said, “It is the first time for the South Korean authorities to ban trading a specific item. It seems that they made such decision worrying about if it gets out of control as they haven’t taken a position on cryptocurrency.”
The major reason behind the meteoric surge in bitcoin prices in November is the announcement of the arrival of Bitcoin futures contracts as planned by two major U.S. exchanges - CBOE and CME Group. The two exchanges have already rolled-up its sleeves and are ready to launch these contract on Dec 10 and Dec 18 respectively. Another major exchange from U.S. - Nasdaq Inc - is also working out options to launch its Bitcoin futures contract in 2018.
The euphoria within investors, surrounding the Bitcoin futures, is so big that this wave has also spread in the Asian markets. An early adopter of Bitcoin and the world’s largest Bitcoin market - Japan - has recently granted permission to start bitcoin futures by 2018. The Tokyo Financial Exchange is currently laying the foundation for the launch of this contracts.
After China’s introduction of the ban on ICOs and Bitcoin trading activities earlier this year, South Korea has been the second most preferred destination after Japan. South Korea’s withdrawal from Bitcoin futures will surely give an easy walk away and an early lead to dominate the Bitcoin futures marketplace, especially in Asia.