Earlier today, Live Bitcoin News reported that bitcoin had suffered a major setback and ultimately fell below $12,000 and back into the $11,400 range. Now, we’re learning that it may have had to do with the seizure of Bithumb, a popular cryptocurrency trading platform based in South Korea.
Bithumb Is Now in the Hands of Korean Officials
Bithumb has been seized by law enforcement officials after it was allegedly discovered that executives were selling BXA tokens – the official tokens of the exchange – before listing them on the Bithumb website publicly. These tokens were sold for a recorded $25 million, which has potentially caused several early investors to lose a lot of money.
The Korean government has recently instituted new financial amendments when it comes to monitoring and controlling the actions of cryptocurrency trading platforms. The recent actions performed by Bithumb allegedly go against these amendments, which is the reason behind the seizure. The news is huge considering it is one of the largest cryptocurrency trading platforms in both South Korea and Asia, regularly recording over $1 billion in asset trades each day.
Following the news, bitcoin’s price fell as low as $11,200. The currency has since gained another $200 and is now trading for $11,400, still $600 lower than where it stood yesterday.
Bitfinex CTO Paolo Adroino points out that it’s only natural for bitcoin to react to news like this in a negative way, calling it a “key characteristic of the asset class.” In a recent interview, he explained:
Bitcoin’s volatility is a key characteristic of an asset class. It is therefore imperative that exchanges offer institutional-grade connectivity that provides high-level performance in all market conditions. Otherwise, it fuels criticism of the digital asset industry from those that wish to deny how much the space has evolved and characterize it as prone to dubious practices. This is unfortunate given the vision and commitment of those that have taken bitcoin from being the preserve of hackers to an asset class traded by the world’s biggest and most advanced market-making firms.
To be fair, Bithumb doesn’t have the most solid history as of late. The exchange made headlines early last year after it was the target of hackers. While the event didn’t result in anything serious, Bithumb still prevented customers from pulling their money out of the exchange.
Some Scary Points in Its History
Later in 2019, the exchange announced that all customers would be forced to use their real names and identities when signing up for accounts, and those that didn’t could be punished or see their accounts suspended. The move was both a welcome and unwelcome change. While many praised the company for pushing towards a safer and more regulated environment, others were critical of Bithumb, claiming it was now interfering with customer privacy.
At press time, it is unclear what will happen regarding customers’ money following the seizure.