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SEOUL (Reuters) – A better deal for South Korea’s cryptocurrency industry might be in the offing as the market regulator changes tack from its tough stance on the virtual coin trade, promising instead to help promote blockchain technology.
The regulator said on Tuesday that it hopes to see South Korea – which has become a hub for cryptocurrency trade – normalize the virtual coin business in a self-regulatory environment.
“The whole world is now framing the outline (for cryptocurrency) and therefore (the government) should rather work more on normalization than increasing regulation,” said Choe Heung-sik, chief of South Korea’s Finance Supervisory Service (FSS), told reporters.
The latest news suggests authorities might adopt a lighter regulatory touch, a step change from the justice minister’s warnings in January that the government was considering shutting down local cryptocurrency exchanges, throwing the market into turmoil.
FSS has been leading the government’s regulation of cryptocurrency trading as part of a task force.
Cryptocurrency operators see Choe’s comments as positive step for the industry’s plans for self-regulation.
“Though the government and the industry have not yet reached a full agreement, the fact that the regulator himself made clear the government’s stance on co-operation is a positive sign for the markets,” said Kim Haw-joon of the Korea Blockchain Association.
South Korea banned the use of anonymous bank accounts for virtual coin trading as of January 30 to stop cryptocurrencies being used in money laundering and other crimes.
Three local banks including Shinhan Bank, Industrial Bank of Korea, NH Bank, are currently offering cryptocurrency accounts to around five local virtual coin exchanges.
Choe said that Kookmin Bank and KEB Hana Bank may have also put in place an appropriate system, though they haven’t as yet started handling transactions.
“I hope they (the banks) no longer fear authorities once they have the right system,” Choe added.
An official from FSS told Reuters tough regulatory oversight of illegal trade in cryptocurrencies will remain in place.
Bitcoin BTC=BTSP, the world’s most heavily traded cryptocurrency, is now changing hands at a three-week high of $ 11,160 on the Luxembourg-based Biststamp exchange after falling as low as $ 5,920.72 in early February.
South Korean electronics giant Samsung has already started production of cryptocurrency mining technologies, local media reported in January.
Reporting by Dahee Kim; Editing by Eric Meijer & Shri Navaratnam
HONG KONG (Reuters) – Chinese video-streaming firm Leshi Internet Information & Technology said it expects a net loss of 11.6 billion yuan ($ 1.83 billion) for 2017, citing a cash crunch at embattled technology conglomerate LeEco that hurt its revenues.
Leshi had reported a profit of 554.8 million yuan in 2016.
It was once the main listed unit of LeEco which was founded by Jia Yueting. Last year, property developer Sunac China became Leshi’s second-largest shareholder and Jia subsequently resigned as chairman and CEO from the company but remains its largest shareholder.
Leshi is trying to recover debt owed by Jia. It said last week it is seeking equity stakes in the car businesses of Jia for debt owed by him and his companies amounting to as much as 7.5 billion yuan ($ 1.17 billion).
Leshi flagged the expected loss for 2017 in a statement to the Shenzhen stock exchange on Tuesday evening.
The announcement sent Leshi’s shares plunging by the daily limit of 10 percent on Wednesday, the sixth consecutive day they have tumbled the maximum allowed since resuming trading a week ago following a 9-month suspension.
(This version of the story corrects fifth paragraph to show announcement was made to Shenzhen stock exchange, not Hong Kong stock exchange)
Reporting by Sijia Jiang; Editing by Anne Marie Roantree and Muralikumar Anantharaman