With any new trend for getting rich quick, snake oil charmers will target unsavvy buyers to invest. The same rang true during the cryptocurrency craze that reached its apex last year, taking particular hold in South Korea. As prices of Bitcoin and Ethereum sometimes ballooned to 50% of the global average, fake news and uncertainty bred ground for scams as people were keen to buy into the fever.
The situation was made more complicated by the harsh language of the government in seeking to stamp out cryptocurrency, prodding more speculation and unsourced headlines about government activity like new taxes.
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Until we can deploy blockchain technology itself to tackle disinformation, good old journalism will have to do. Crypto news outlet CoinDesk, in partnership with South Korean independent news company The Hankyoreh, launched CoinDesk Korea last month to introduce an air of legitimacy to an industry fraught with hype and fake news.
For traditional outlets that have been losing ground in recent years, according to Korea Press Foundation data, crypto news is bringing a wave of interest back to readership. The Hankyoreh, which runs a print newspaper, has expanded its wheelhouse through licensing agreements for online translations and distribution, with the CoinDesk deal operating much like its partnership with Huffington Post to run HuffPo Korea.
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The crypto craze is also giving birth to several new blog outlets like Token Post and Blockin Press. But with those new outlets come a risk. In South Korea, which has waged a long war against fake news, many outlets – not necessarily the aforementioned ones – don’t take time to verify news before re-reporting it as their own, says Yoo Shinjae, editor of the new CoinDesk Korea. Most of the local crypto news is delivered by media startups with no journalism background, as is the case in many markets around the world. Then that news, verified or otherwise, gets translated into English and finds its way into the mainstream, which might impact global markets.
Last year, several ICOs in Korea claimed to have the backing of household Korean brands like Hyundai or Samsung, and major brokers would recommend people to invest in these coins, Yoo explains. Other fake news speculates on the reasons why coin prices have risen or fallen.
South Korea, which made its mark last year as one of world’s largest trading markets for cryptocurrencies such as Ethereum, has also become an important hub for coins like Ripple (XRP) and Quantum (QTUM). But the fever that drove the peculiar market to feature in global headlines has also bred grounds for scams, preying especially on the elderly.
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“People know that we are not just some fraudsters trying to make money out of this blockchain hype. I think that gives us a good starting point,” he said in an interview at his Seoul office.
In order to build trust, increase understanding and make the market safer for everyone, there needs to be more serious discussion, and not just government announcements that focused on stopping speculation, Yoo says.
Less Sensationalism, More Accessibility
Yoo hopes to create a more two-way conversation, approaching the industry with less sensationalism than the legacy media headlines but more accessibility than the niche startups, which usually lack the resources to accurately cover global news in the Korean language.
“Nobody has tried to contact politicians or people like Seoul Mayor Park Won-soon,” who pledges to launch a crypto coin for Seoul City as he runs for a third term, he says. “They are just inside this small crypto world in Korea and covering that small world.”
The need for a watchdog is ever more important as South Korea’s relevance in the global crypto industry continues.
“Some people think [cryptocurrency] is something spooky, something half-legal, half-illegal, something in a gray area. I’m trying to bring that to light,” he says. “If there are criminals or scammers, we as a watchdog have to bring them to justice. And there are many good people who are very serious about their business and their technology – we give them a chance to be exposed.”
For the left-leaning Hankyoreh, the power of blockchain strikes a chord with the company’s own identity, says Yoo.
He believes decentralization is highly related to democracy, politically and economically. South Korea’s democratic movement in the 1980s formed the foundation of The Hankyoreh, when an oppressive dictatorship threatened the free press and people crowdfunded a newspaper to retain an independent voice.
“Democracy is the key value of this company. Blockchain is very related to democracy,” he says. “I think it’s very natural for Hankyoreh to do something in this area.”
While the top news is still about cryptocurrency, blockchain represents more than a new technology and investment tool, Yoo says. “I think it’s about social changes and very new ideas about how the new society can work and how businesses can change,” he says.
South Korea is CoinDesk’s second foreign-language market, following a deal with Morningstar Japan in early March to translate and distribute its content to Japanese readers. Korea has “tons of interest” but limited access to news due to the language barrier, says Kevin Worth, CoinDesk CEO. Asian country partnerships are a priority as readers in Europe, its other major readership base, would more likely read English, he said. It is hoped the partnership will eventually go both ways to allow Korean readers more understanding of the global market, and vice versa.
“The details of the crypto-craze story is certainly an interesting one. I think we and The Hankyoreh are spending more time thinking more about content on the broader technology story and how blockchain technology has potential to disrupt a lot of business models,” Worth said in a phone interview.
Monitoring prices is not his biggest interest, but Yoo is confident that South Korea’s crypto fever will rebound. “I think the interest is still there. If I thought it was gone, we would not do this [project],” Yoo says. Prices may not rise as quickly as late last year, but he expects the price to return to the same level within the year. “I think people are expecting for spring to come.”
Yohan Yun contributed to this article.