Exclusive report from Money Today dated January 16, 2018.
"The police took the view that margin trading amounts to gambling because it involves an element of 'chance,' in that it means trading on a prediction of the future price of a cryptocurrency.
Their position is that going long or short in anticipation that the price will rise or fall — even one second later — is itself problematic. Short selling takes place in the stock market too, but the issue is said to be that cryptocurrency trading is not within the regulated perimeter. They also saw a problem in exchanges encouraging 'speculation' by offering margin trading as an official service.
Coinone responded that it had obtained advice through Law Firm Changchun that margin trading does not satisfy the requirements of 'gambling' under the case law or the academic literature.
Coinone argued: 'Cryptocurrency margin trading does not amount to a "chance contest" at a future point in time, because an investor can close the trade at the present moment if they wish,' adding, 'It is not the concept of "mutual gain and loss" — a requirement of gambling, under which one party's gain is the other's loss — but simply a fluctuation in the value of the cryptocurrency one owns.'
Some also point out that there is no basis under current law for punishing margin trading by cryptocurrency exchanges, since the Lending Business Act, the Specialized Credit Finance Business Act and the Financial Investment Services and Capital Markets Act contain nothing regulating the provision of margin credit to cryptocurrency investors or margin trading."