Cryptocurrencies Stage Dramatic Comeback After Flash Crash

Update (1050ET): Ripple crashed down over 30% after the initial headlines then exploded back higher... and Ethereum is now unchanged on the day...

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Amid headlines that South Korean regulators are inspecting 6 banks, including Industrial Bank of Korea, that provide virtual accounts to companies related to cryptocurrency, has sparked selling pressure across the entire space with Ripple down almost 20% today.

 

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Bloomberg reports that South Korea's Financial Services Commission Chairman Choi Jong-ku said in a speech text:

  • There’s high possibility cryptocurrency transactions could be used in money laundering.
  • South Korea to suspend virtual account- related operations of banks if they are found to have broken laws related to cryptocurrency.
  • Regulator also strengthen probe into cryptocurrency exchanges over price manipulation, money laundering, pyramid scheme.
  • Side effects of cryptocurrency "serious"; regulator will consider all measures including shutdown of cryptocurrency exchanges.
  • Cryptocurrency fever in S. Korea is much stronger than other countries; regulator won’t let S. Korea take the lead in abnormal cryptocurrency trading.

And the last few days have seen that Korean exuberance being smashed out of cryptos.

 

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Ethereum remains the YTD winner for now, but as is clear Ripple quickly went from hero to zero as the volatile trading continues.

Bitcoin is back below $15,000...

 

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Ethereum is holding above $1000 for now...

 

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and Ripple is testing significant support...

 

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As CoinTelegraph reports, as speculative investments into Bitcoin and altcoins continue to trouble regulators worldwide, Korea has taken a hardline stance in recent months.

New legislation will seek to place heavy restrictions on how cryptocurrency exchanges can operate in the country, as well as who can use them and to what extent.

South Koreans will likely only be able to hold one exchange account linked to their real name, while tax obligations are also being overhauled regarding profits.

Reporting on the inspection, Yonhap News Agency appeared to forecast a predatory climate for exchanges.

“They (the FIU and FSS) are seeking to cut off fund inflows into cryptocurrency exchanges and shutter cryptocurrency exchanges that have loopholes in their system,” it claims.

What these “loopholes” might entail remains vague, yet the security setup of principal exchanges has come into the spotlight following an organized hacking attempt by a Korean news agency.

Using private white-hat hackers, the agency successfully gained entry into exchange accounts it set up maliciously, bypassing even two-factor authentication, it reported last month.

Comments

Gap Admirer zorba THE GREEK Jan 8, 2018 10:29 AM

Now look, all you oldbug peanutz.  This is stable currency based on rare, valuable, maff.  These small ups and downs are what all stable currencies do on an hourly basis.  Cryptos are money, not speculation vehicles.

buy, Buy, BUY!!! 

sell, Sell, SELL!!!

buy, Buy, BUY!!! 

And that Doggie Coin that the 1st post is pumping... Going to the MOON!!!  It has rare, valuable, maff backing it so moon-shot is guaranteed.  Puppy Coin will be next.  Get in on these rare, valuable, stable, monies while you still can.  Again, not becasue they are speculation vehicles and you want to make a quick buck for no work, but becasue they are sound money.

In reply to by zorba THE GREEK

LetThemEatRand tmosley Jan 8, 2018 11:07 AM

In a truly "free market," there are no rules or regulations.  It is just a market of buyers and sellers.  The downside is that some of those buyers or sellers may be committing fraud, and there are no rules or regulations (or regulators) to stop them.  Kind of like if you buy a bunch of illegal drugs from some guy on the corner and get home only to realize he sold you fake drugs.  You can't exactly call the police on him, can you.

In reply to by tmosley

LetThemEatRand tmosley Jan 8, 2018 11:25 AM

That sounds great in theory, but it is a meaningless statement.  Once there are rules, there need to be people who can enforce those rules, and then people who can arrest people who violate the rules because just having people pay up when caught isn't going to prevent them from doing it again.  Then then you need arbiters to decide if a rule was really broken (judges).  Pretty soon it looks exactly what like what you now call regulated markets.

In reply to by tmosley

LetThemEatRand BaBaBouy Jan 8, 2018 10:55 AM

"This is whats called a FREE MARKET"

But TPTB hate free markets.  The only markets allowed are ones they can tax and control.  True story, Max Keiser had a guy on a couple of days ago (Richard Heart, some Bitcoin enthusiast/expert) who was literally complaining without irony that a bunch of shady characters had copied bitcoin and were stealing away BTC buyers, and that there is no regulatory framework to stop them.  I could not help but think of the first groups in the Wild West who said to each other, "maybe we ought to get a sheriff."

In reply to by BaBaBouy

zebra77a tmosley Jan 8, 2018 11:30 AM

Wash trading is the LEAST of the issues. The fact that many exchanges only hold 30% of the crypto being traded on their books opens up the potential for unlimited re-hypothecation.. naked shorting, and fake liquidity pool recaptures.. It allows for inflation of crypto far beyond cryptos real inventories via fake accounts.-

Only when crypto is withdrawn from the exchange is is 're-chained' to the blockchain. If too many people withdraw their crypto it forces them to try to find it on the open market.  But in reality they could have fractional inventories 10x their held coin... Usually on a exchange run they just blame hackers and dump the inventory to their pocket - like Mt Gox.

The question then becomes of the 1034 listed currencies on coinbase, with their respective blockchains how many blockchains does Coinbase PAY BACK TO? Which shows you clearly that Coinbase is sucking all blockchain liquidities of ALL the coins into one giant database.  A centralization operation at it's finest, and they are also 100% tracked and monitored..

In reply to by tmosley

TradingTroll tmosley Jan 8, 2018 11:33 AM

What’s a non fraudulent exchange? Like the NYSE or Nasdaq??

 

Grey markets are where you make money. Bring in regulations and you can stick a fork in it. 50% of Bitcoin futures are short. And it goes down. Retail is still buying as paper shorts crush price.

 

Careful what you wish for or it will be a gold and silver déjà vu.

In reply to by tmosley

Silver Savior kahplunk Jan 8, 2018 10:32 AM

My nerves are being tested. You are most likely right but every time this happens I start questioning the whole thing. (Then it always goes up to some crazy price in a few hours lol. 

I guess this is the wrong place to be an emotional investor. It's not like physical gold where you still have your full ounce of gold no matter what happens. That might be more my style.

In reply to by kahplunk

Silver Savior tmosley Jan 8, 2018 11:25 AM

Yeah I do take money off the table and turn it into gold but just not at the level I should. I never feel comfortable making big moves out of something I work hard to aquire and amass. 

Emotion still mostly rules me. I have to stop that. Holding tight and I have planned sell points in place this time. I have to do this.

In reply to by tmosley

zebra77a Silver Savior Jan 8, 2018 11:37 AM

Exchanges [ARE] the risk of risk of risk to the n squared. If you have more than 10% of your crypto exposed to an exchange at any one time be careful.  Crypto is something I do believe one wants to be constantly re-securing to the block chain (taking OFF the exchange), or passing through an exchange to cash in your pocket.

In reply to by Silver Savior

scouzi Jan 8, 2018 10:01 AM

Guys! It's not Ethereum - it's Ether.  Etherium is the platform and Ether is the currency.

a Smudge by an… scouzi Jan 8, 2018 10:21 AM

Got it. So etherium is the platform and now there's a dog based currency running on it. Presumably generating more ether or we'd have two dogs involved. And the dog is kept in place by tethers to the etherium platform or it would just run away (go long on a squirrel).

It's all starting to come together in my mind.

In reply to by scouzi

U. Sinclair Jan 8, 2018 10:09 AM

Maybe it is naive to think that governments and banks will allow people to step outside their system and disrupt it completely.
Besides that, 95% of the population has got no clue what is going on.
They only here Wild West stories about Bitcoin and Co and they have no idea what is about.
When the governments and central banks step in because they say the crypto's are a threat to the current money system and ban them because it is best for the people, 95% of the population will accept that explanation.

Can crypto's been banned?
If a government decides to make trading or possessing Bitcoins/crypto's illegal, questions will be raised about how exactly it will enforce such a ban.
It is impossible for a government to seize your Bitcoins/crypto's, unless you decide to handover your private keys.
However, the fast majority of citizens and institutions like to stay on the right side of the law.
So the demand for Bitcoin/crypto's would plummet if the government decided to ban it.
All exchanges in that country would also be shuttered and buying/selling Bitcoin/crypto's would be very difficult and risky without expert technical knowledge.
This would suffocate Bitcoin/crypto's in that country and the government’s objectives might be achieved.
Then central banks step in and offer their own crypto coin, how convenient for them.
No more cash and everybody is locked up in traceable digital digits.
Convert some of your crypto's in precious metals en hide them from your government.
They will be very valuable once all the cash is removed from the system eventually.
Just in case the scenario unfolds like described above.
Some things to take into account.

U. Sinclair Victor999 Jan 8, 2018 10:34 AM

In 1933, during the gold confiscation no reports were made that the authorities did a house to house search.
This action would of course be futile since less than 1% of the people own pm's nowadays.
Then, you can also hide it in places they will never find it.
The change for being tracked and traced with crypto's is a lot riskier than most people think.
You make sure you belong to the 1%.
 

In reply to by Victor999