Fri, Sep 07, 2018 - Page 10 News List

Korea Post turns to Goldman for crypto know-how

Bloomberg

It is one of the last big money managers you would expect to take an interest in cryptocurrencies.

However, Korea Post, which oversees US$112 billion and is run by the same South Korean government that warned virtual currencies might corrupt the nation’s youth, is trying to learn more about the nascent market.

Korea Post president Kang Seong-ju said in an interview that he discussed cryptocurrencies with David Solomon, the incoming CEO of Goldman Sachs Group Inc, at a recent meeting in New York.

Korea Post staff is to meet with Goldman’s crypto research team in Hong Kong at the end of this month to study digital assets, blockchain and related areas, such as artificial intelligence.

“I asked Goldman to pass on their know-how in the cryptocurrency area,” Kang said in an interview in Seoul. “Since cryptocurrencies are considered to have potential, and are something many people are watching, we’ll need to learn the strengths and weaknesses.”

While Korea Post has no plans to invest in virtual currencies, the research trip underscores how the once-fringe asset class is moving closer to the mainstream.

Goldman, one of the first Wall Street companies to clear regulated bitcoin futures, has hired a head of digital-asset markets and is said to be considering a plan to offer cryptocurrency custody services as more institutional investors express interest in the space.

The New York-based firm declined to comment on its arrangements with Korea Post.

In South Korea, one of the hot spots for last year’s global cryptomania, policymakers have generally taken a dim view of the market and the government banned initial public offerings in September last year.

Virtual currencies yesterday plunged for the second time in less than 24 hours, sinking toward a nine-month low amid concern that broader adoption of digital assets would take longer than anticipated.

Bitcoin, the largest cryptocurrency, tumbled as much as 9.8 percent and was trading at US$6,422 as of 1:25pm in Hong Kong, according to Bloomberg composite pricing.

The Bloomberg Galaxy Crypto Index, a gauge of the largest digital assets, traded near its lowest level since November last year as rival coins Ripple, Ether and Litecoin also fell.

Business Insider on Wednesday reported that Goldman was pulling back on near-term plans to set up a crypto trading desk, while trading platform ShapeShift AG on Tuesday said that it would begin asking users for personal information — a policy that might drive away customers who value anonymity.

The moves follow last month’s decision by US regulators to reject another round of bitcoin exchange-traded fund proposals.

While many banks and institutional investors are dipping their toes into the world of cryptocurrencies, concerns about everything from money laundering to market manipulation and unclear regulations have prevented widespread adoption.

The market value of virtual currencies tracked by CoinMarketCap.com has slumped about 75 percent from its January peak to US$204 billion.

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