Published: Thu, January 11, 2018
Markets | By Rosalie Gross

South Korea announces Bitcoin ban plan

South Korea announces Bitcoin ban plan

The decision to implement an outright ban, only weeks after implementing new regulations, was announced by South Korea's justice minister at a press conference Thursday morning local time.

Just as my story about the Chinese government and authorities putting their boot down onto cryptocurrency miners in China, the South Korean justice minister said he's preparing a bill a ban on cryptocurrency trading through South Korean exchanges.

Bithumb and Coinone, two of South Korea's leading cryptocurrency exchanges by volume, are reportedly the subjects of a tax investigation being conducted by the country's National Tax Service (NTS).

In South Korea, where cryptocurrencies and, in particular, bitcoin, are extremely popular among general population, the financial authorities display a far more timid attitude, with the chair of the Financial Supervisory Service (FSS), Choe Heung-sik, last month warning of a "bitcoin bubble" which will inevitably burst.

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.

South Korea has been a hot market for cryptocurrencies.

More news: WhatsApp Android beta gets new feature to switch from voice to video

Bitcoin was one of the currencies to sink when CoinMarketCap, one of the industry's most prominent global indexes, carried out the move without any warning, resulting in a steep drop in all virtual coins they track.

Data from CoinMarketCap showed the market for digital coins tanked amid reports out of South Korea.

The exclusion of data from South Korean exchanges, where virtual currencies trade at a wide premium, sparked confusion and triggered a selloff.

At one point overnight, XRP was trading at an average of $3.93 on South Korean exchanges - 38% above the token's current price of $2.43, according to Markets Insider. The South Korean finance ministry has been working towards ways of taxing cryptocurrencies - the markets of which have become nearly as large as Korea's small-cap kosdaq index.

Some investors appeared to have taken preemptive action. Bitcoin has continued its downward slide and has lost 24% in four days, falling from $17,700 to $13,500, according to Coinmarketcap. The source said police have been investigating the company since a year ago, suspecting their operations of "gambling".

We were asked by the tax officials to disclose paperwork and things yesterday. The exchange denied a Reuters report that its offices had been raided.

Like this: