Bitcoin plummets as South Korea announces plans to ban cryptocurrency trading

Bitcoin plummets as South Korea announces plans to ban cryptocurrency trading

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SOUTH Korean authorities are preparing to ban cryptocurrency trading, the country’s justice minister announced on Thursday. “There are great co

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SOUTH Korean authorities are preparing to ban cryptocurrency trading, the country’s justice minister announced on Thursday.

“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” Park Sang-ki said in a statement distributed by the ministry’s press office, according to Reuters.

The statement, which caused turmoil on crypto markets, was later moderated by the presidential office, which said a ban was under review but no policy changes had been made.

The Associated Press reported that while the country’s justice ministry had taken a stern stance against cryptocurrencies, other agencies opposed an outright ban.

Mr Park said he could not disclose details but would jointly work with a government task force to shut down virtual currency exchanges in South Korea, which is one of the world’s biggest markets for the likes of bitcoin and ethereum.

The news sent crypto markets into free fall, with bitcoin down 14 per cent to $US12,845, ethereum down 10 per cent to $US1190 and ripple down more than 17 per cent to $US1.66 by late Thursday.

According to industry website CryptoCompare, more than 10 per cent of ethereum is traded in South Korean won, second only to US dollars which account for around 32 per cent. Nearly 14 per cent of ripple and 5 per cent of bitcoin is traded in won.

It came after a spokesman for the Coinone exchange earlier told Reuters that “a few officials from the National Tax Service” had raided their office this week, with police investigating suspected “gambling”. Authorities also raided the Bithumb exchange.

Last week, South Korean authorities reportedly began inspections at six banks that provide accounts to companies involved in cryptocurrency trading, citing concerns about potential money laundering.

Meanwhile, Chinese authorities are planning to crack down on bitcoin miners in order to “guide” them towards an “orderly exit” from the country.

“The regulatory noise in South Korea and China, that’s going to be an ongoing threat to bitcoin and to crypto more generally for the foreseeable future,” ABC Bullion chief economist Jordan Eliseo said earlier this week.

“Governments, financial institutions, you name it, are still working out how best to deal with crypto and the businesses involved with it.”

On Monday, the widely used research website Coinmarketcap removed average price data from Bithumb, Coinone and Korbit from its calculations, causing confusion in the market. Prices on South Korean exchanges are typically 30 per cent higher on average.

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