Bitcoin Plunges as South Korea Crafts Cryptocurrency Crackdown

Bitcoin Plunges as South Korea Crafts Cryptocurrency Crackdown

"There are great concerns regarding virtual currencies, and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges", said Park.

Authorities had "grave concerns" over the craze and were "aiming to close virtual currency exchanges" in the country, he said.

Bitcoin had the highest market cap of $230.7 billion among all cryptocurrencies, showed data by CoinMarketCap.

"Cryptocurrency trade in Korea is similar to speculation and gambling", he said, "(Cryptocurrency) does not have a physical denomination.

That difference in price is called a "kimchi premium" by many traders.

The value of bitcoin fell around 7 percent in the wake of the announcement, which came from South Korea's justice minister Park Sang-ki on January 11. About exchange closure, there is no difference in views among government offices. Capital is flying away to virtual currencies.

At the time of writing, Litecoin was down 6.6% to $232.4, with this morning's decline far less material than its peers, with most of the cryptos seeing double digit declines in the early part of the day. The employee said that the exchange was cooperating with the investigation.

Under the measure, only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals, while the issuance of new virtual accounts to cryptocurrency exchanges will be banned.

More news: Lenovo Debuts Standalone Mirage Solo Daydream VR Headset, Mirage Daydream VR Camera

Following the presidential office's message, the Justice Ministry softened its stance on the issue. A source at Coinone, a major exchange in South Korea, told CNBCthat local police have been investigating the company since past year, adding that "they think what we do is gambling".

South Korea's escalation in its position against cryptocurrencies comes after it announced tighter regulations for the trading of bitcoin in late-December. Exchanges have moved to places like Hong Kong/Tokyo to service demand from investors in the country.

The crackdown in South Korea by authorities included a raid on the country's second largest virtual currency operator, Bithumb. In Dec. 2017, the country made it more hard to trade cryptocurrencies anonymously, threatening the possibility to ban cryptocurrency trading altogether.

South Korea, which is also among the biggest bitcoin markets, has been looking for ways to regulate trading. At 04:20 UTC, the price of a single bitcoin crashed to $12,884.91, down by 12% from 24 hours ago.

In the past one week, the price of most of the top cryptocurrencies falls down.

Omnitel Co., which has a stake in Bithumb, had plunged by its daily limit of 30 percent at one point in afternoon trading.

Chat with other cryptocurrency enthusiasts and investors.

Related Articles