Author: Climber, Golden Finance
On the evening of December 3, South Korean President Yoon Seok-yeol announced the implementation of "emergency martial law" across the country, which triggered panic selling in the Korean crypto market. Bitcoin fell below $70,000, and many blue-chip altcoins fell by more than 30%. FUD sentiment spread to the global crypto market.
Fortunately, the martial law crisis was a false alarm. With the revocation of the decree, the crypto market returned to stability and Bitcoin returned to above $66,500. In this storm, judging from the speed of Bitcoin's recovery and the subsequent rise of various altcoins, the crypto market is still favored by capital.
1. The whole story of the martial law incident
On the evening of December 3, South Korean President Yoon Seok-yeol suddenly made a live television speech, announcing the implementation of "emergency martial law". He claimed that the opposition party was coercing the National Assembly and disrupting the country, and said that he would purge the "anti-national forces" in South Korea. The outside world analyzed that the recent series of legislation promoted by the South Korean opposition party against the president's wife and the impeachment of prosecutors and other public officials may be the fuse for Yoon Seok-yeol's announcement of "emergency martial law".
This is the first time South Korean President Yoon Seok-yeol has declared martial law in South Korea since 1980.
Subsequently, the South Korean Martial Law Command issued Martial Law Order No. 1. The South Korean National Assembly was closed urgently, and members of the South Korean opposition party clashed with the police in front of the National Assembly.
Former South Korean President Moon Jae-in said in response to President Yoon Seok-yeol's declaration of emergency martial law: "I hope the National Assembly will quickly stand up to protect the collapsing democracy." Moon Jae-in wrote on social media: "South Korea's democracy is facing a crisis of reaching a new height." He said: "I hope the people will work together to protect and save democracy and provide strength for the National Assembly to function normally."
Some analysts pointed out that if the opposition-controlled Congress voted to abolish the agreement, the agreement would be short-lived, and this was later proved to be the case.
South Korean National Assembly Speaker Woo Won-sik said that the South Korean National Assembly will respond to the emergency martial law in accordance with constitutional procedures. After that, the South Korean National Assembly began a plenary session and voted on "requesting the lifting of the emergency martial law order." 190 members attended the meeting, 170 members voted in favor, and Woo Won-sik subsequently declared the emergency martial law order invalid.
Yoon Seok-yeol later announced in the presidential office that he had decided to accept the request of the National Assembly and lift the martial law order. This was just over six hours after he implemented the martial law order. In addition, the South Korean cabinet also agreed to lift the martial law order.
However, the storm is far from over for Yoon Seok-yeol.
On December 4, South Korea's largest opposition party, the Democratic Party, said it would accuse President Yoon Seok-yeol, the Minister of Defense, and the Minister of Public Administration and Security of sedition and push for impeachment. The Democratic Party said it was pushing for the impeachment of President Yoon Seok-yeol and expected to complete the drafting of the impeachment documents today.
The Democratic Party then urged Yoon Seok-yeol to step down immediately and proposed that the entire cabinet resign and the defense minister be removed. It also said that if he did not resign immediately, it would proceed with impeachment proceedings.
The Democratic Party issued a resolution containing the above content after convening an emergency meeting of members of the National Assembly that day. The resolution reads: "Yun Seok-yeol's announcement of the implementation of emergency martial law clearly violates the constitution and does not comply with any conditions required for the declaration (martial law)", "The declaration of emergency martial law itself is invalid and a serious violation of the constitution", "This is a serious act of civil unrest and a perfect reason for impeachment."
In addition, the leadership of South Korea's ruling People Power Party also held a closed-door supreme committee meeting in the National Assembly, where plans such as President Yoon Seok-yeol's withdrawal from the party and the entire cabinet's resignation were discussed in order to hold Yoon Seok-yeol accountable for issuing an emergency martial law order.
As of the time of writing, the director and chief secretary of the South Korean presidential office have collectively resigned, and South Korean cabinet ministers have collectively resigned.
In addition, Yoon Seok-yeol was originally scheduled to attend a meeting to inspect the drug control situation that morning, but due to the martial law crisis, the meeting was postponed. Yoon Seok-yeol's other activities will also be affected.
2. A night of terror, but the crypto market is safe
The martial law order announced by South Korean President Yoon Seok-yeol caused panic in the South Korean crypto market and even caused a decline in markets outside the local area.
Data shows that the martial law order caused the trading volume of the Korean crypto market to surge to $34 billion within 24 hours, setting a new annual high. Among them, Upbit's trading volume reached $27.25 billion.
The increase in trading volume was mainly due to panic selling in the Korean crypto market, with the price of Bitcoin falling to $62,182 at one point and service outages occurring at several exchanges.
On the evening of December 3, as the price of Bitcoin on the Upbit platform "slipped" below $70,000, the prices of various altcoins on the platform experienced a flash crash. The mainstream altcoin XRP fell to $1.3, ETH fell to $2,712, SOL fell to $134...
According to market news, the UPBIT platform was interrupted due to increased traffic. The USDC/USDT exchange rate on the Upbit platform rose to 1.2.
Affected by the flash crash of the Korean crypto market, the global crypto market also experienced an overall decline. Bitcoin also fell to $93,578 on mainstream trading platforms such as Binance. According to Coinglass data, the entire network had a liquidation of $611 million in the past 24 hours, of which long orders were liquidated for $384 million and short orders were liquidated for $227 million.
However, with the South Korean government's statement that it will take all necessary measures to stabilize the market, provide unlimited liquidity to the market when necessary, and the lifting of martial law, the crypto market has gradually returned to stability.
In addition, South Korean regulators said they are ready to deploy a 10 trillion won stock market stabilization fund.
As the incident subsided, Bitcoin also rebounded strongly and broke through US$96,500, completely erasing the decline caused by the emergency in South Korea.
However, during this turmoil, a large amount of bargain-hunting funds poured in.
According to Lookonchain, the cryptocurrency market plummeted after South Korea announced "martial law". Many whales transferred a large amount of USDT to Upbit, probably to buy at the bottom. Within 1 hour after the announcement of "martial law", more than 163 million USDT flowed into Upbit.
In addition to the crypto market, South Korean-related assets also plummeted before and after the martial law crisis, with the Korean won falling to a two-year low, further triggering investors' concerns about political instability and turmoil.
Following the South Korean martial law controversy, PolyMarket traders are now predicting a 72% chance that South Korean President Yoon Seok-yeol’s government will be overthrown by 2025.
Another trader said he suspected South Korean authorities were selling dollars when the onshore market opened to limit the won's losses.
The controversy over martial law in South Korea seems to have subsided, but there are still several major crypto-related events in South Korea that are worth paying attention to recently.
On November 28, the Bank of Korea cut interest rates by 25 basis points to 3.00%, while the market expected it to remain unchanged at 3.25%.
On December 1, South Korea once again postponed the collection of cryptocurrency taxes until 2027. The proposal to "postpone cryptocurrency profit tax" was put forward by the South Korean government and the ruling People Power Party. The Democratic Party previously stated that postponing taxation was a political trick of the ruling party.
On December 3, South Korea will charge regulatory fees to crypto exchanges such as Upbit, Bithumb and Coinone starting next year. The regulatory fees are calculated based on operating income and paid by financial institutions such as banks, investment companies, and insurance companies to cover FSC's inspection and supervision services.
summary
South Korean President Yoon Seok-yeol’s announcement of martial law has caused a lot of turmoil in the crypto market, especially in the crypto contract market outside of South Korea. Fortunately, the turmoil was short-lived and the crypto market recovered quickly. However, the follow-up work on the current South Korean president is still ongoing. With the submission of the impeachment bill, South Korea will usher in another wave of turmoil. By then, the local crypto market in South Korea may usher in new changes.
