Reuters published a misleading report Thursday giving the impression that South Korea was certain to ban the trading of cyber currencies such as Bitcoin, contributing to a panicked sell-off of digital blockchain assets.
The report, from authors Cynthia Kim and Dahee Kim, bears the headline “South Korea plans to ban cryptocurrency trading, rattles market.” It also claims that authorities performed “raids” at major exchanges Coinone and Bithumb.
However, an update to the story concedes that lawmakers have not even drafted a bill, and if they were to do so, passage “could take months or even years.” The clarification, still not suggested in the headline, reads:
After the market’s sharp reaction to the announcement, the nation’s Presidential office hours later said a ban on the country’s virtual coin exchanges had not yet been finalised while it was one of the measures being considered.
A press official at the justice ministry said the proposed ban on cryptocurrency trading was announced after “enough discussion” with other government agencies, including the nation’s finance ministry and financial regulators.
Once a bill is drafted, legislation for an outright ban of virtual coin trading will require a majority vote of the total 297 members of the National Assembly, a process that could take months or even years. [emphasis added]
The initial story, a write-through of only two paragraphs, did not mention the denials or the prolonged timeline. A global market roundup, published hours later, does not mention them either but still depicts the “ban” as impending.
Joseph Young, a Hong Kong-based freelance writer, declared the story “fake news” and “deception.” He also disputes the articles’ characterization of “raids” on exchanges.
Authors Kim and Kim do not disclose Thomson Reuters’ financial interest in digital currencies, particularly the Ethereum development platform, via its subsidiary BlockOne. Since I’ve opened that can of worms, readers should consider my own interest and biases: I have exchanged dollars for digital currencies like Bitcoin, Litecoin, Ethereum, and Dash — plus several other altcoins that I have mined. A fall in the cyber currency markets does decrease the value of the assets I have, but the value of my time/dollar investments are not considerable enough that a total market collapse would hurt me financially. On the flipside, I was pretty late to the game on these assets, so a dip in their prices is an opportunity to strengthen my long positions.
The Reuters report echoes another recent fake news scandal: ABC’s Brian Ross falsely reported in December 2017 that Michael Flynn would testify that “candidate” Donald Trump ordered him to contact the Russian government — when it was really president-elect Donald Trump. The fake report sparked a massive dip in U.S. stocks, and President Trump suggested on his Twitter account that stockholders should sue ABC and Ross for any incurred losses.