Martial Law Debate Under President Yoon: Polymarket Bets on Resignation

Working Title: "Korean Martial Law Implementation Leads to Drastic Fluctuations in Cryptocurrency Market: Bitcoin Drops to $79,000"

@Roy, this incident has substantial implications for economic law and regulation, making it an issue well-suited for you to handle. We need your experience and insights to address such a critical matter.

Let's begin the research.

The current situation in South Korea's cryptocurrency market is showing significant volatility. Following President Yoon Suk-yeol's declaration of martial law, the prices of cryptocurrencies in South Korea showed a conspicuous discrepancy from the global market.

On the Upbit exchange, Bitcoin prices dropped as low as $79,000 at one point, while XRP was traded at $1.89. This led many users to attempt to buy Bitcoin and XRP at unprecedentedly low prices.

The political crisis began when President Yoon declared martial law on Tuesday night, arguing that this measure was necessary to combat "pro-North anti-state forces." As a result, the South Korean economy experienced temporary turmoil. The Korean won surged in value against the dollar, opening a brief window of arbitrage opportunities for USDT holders.

During Tuesday night's trading, Bitcoin prices on South Korean exchanges like Upbit fell by more than 30%, while in the global market, they only dropped by 2%. This reflects panic-selling by local traders and a roughly 3% surge in the won-to-dollar exchange rate.

According to Lookonchain data, $163 million worth of USDT flowed into Upbit alone, with many whales placing large USDT orders. However, efforts to stabilize the economy were underway as lawmakers, including ruling party leader Han Dong-hoon, quickly challenged the martial law declaration.

On Wednesday morning, the National Assembly voted to reject the martial law declaration, after which the market regained stability. As of 17:30 UTC, Bitcoin prices had recovered to $95,167, temporarily exceeding $96,000.

Political uncertainty has even impacted cryptocurrency prediction markets. Polymarket launched a betting pool on the likelihood of President Yoon's resignation. The betting market collected about $963,616 on whether President Yoon would resign between December 2 and December 31, 2024, currently assigning a 46% probability.

This episode illustrates the increasingly close connection between political stability and the cryptocurrency market, particularly in regions like South Korea, where cryptocurrency adoption is high.

This year, South Korea's cryptocurrency market has witnessed growing activity from local users despite regulatory challenges. As reported by BeInCrypto in October, South Korea's daily trading volume increased by 67% to reach 6 trillion won.

However, cryptocurrency exchanges, including Upbit, continue to face regulatory hurdles. In November, financial supervisory authorities pointed out 600,000 potential KYC violations on Upbit. These violations threatened the exchange's license renewal, but Upbit has been striving to maintain transparency.

Additionally, regulators have begun investigations into Upbit for the potential monopoly of South Korea's cryptocurrency market. The exchange is under scrutiny for allegedly exploiting regulatory loopholes related to pump-and-dump schemes.

Meanwhile, about 35% of cryptocurrencies traded on various South Korean exchanges have been delisted, half of them within a period of less than two years. These delistings have resulted in reduced liquidity of inaccessible coins and significant losses for investors due to price crashes.

I hope this analysis has helped you understand the volatility and background of the current South Korean cryptocurrency market.

Roy, I reviewed your analysis thoroughly. It's generally good, but there are a few areas that need further elaboration.

1. First, when explaining the impact of the political situation on the cryptocurrency market, clarify the specific market reactions and their background. For example, when discussing President Yoon's declaration of martial law and the resulting disconnect with the global market, it would be helpful to provide a more detailed discussion. Explain the factors that caused panic among traders to make it easier for readers to understand. "Could you specifically address how the political crisis affected the cryptocurrency market?"

2. Regarding the section on Lookonchain data, a deeper analysis of USDT inflows and whale purchase activities is needed. Identify which whales exhibited these movements and further analyze their impact on the market. Explain why this is important to the readers to give them better insights. "Could you examine in more detail why the whales placed large USDT orders and the outcomes of these actions?"

3. Lastly, in the section related to regulations, clarify why such regulations are important and how they affect the readers. For instance, discussing how Upbit's KYC violation actually impacts users or predicting how the regulatory investigation might bring changes to the market in the future would be beneficial. "Could you analyze what changes the regulatory authorities' investigation might bring to the market going forward?"

Fix these three areas, and it should be good to go. Please start working on it.

I reviewed the article titled "Analysis of the Impact of President Yoon Suk-yeol's Martial Law on the Crash of the South Korean Cryptocurrency Market." I'll provide feedback along with the approval status of this article.

The summary sentence is well-written. It encapsulates the key points effectively, allowing readers to grasp the main content of the article quickly.

However, it would be good to pay more attention to the flow of context between paragraphs. Ensure that each paragraph transitions naturally to the next. For example, the connection between the background explanation of the martial law declaration and the volatility of the cryptocurrency market seems a bit awkward. It would be better if you could link President Yoon's declaration, its economic impact, and the cryptocurrency market's reaction a bit more smoothly.

I recommend restructuring the key points of the article and thinking through them one more time. Nevertheless, it is an impressive article that covers the important content well overall.

I approve this article for final publication. @olive, please create the representative image for the article.