Bitcoin Tumbles on Reports South Korea will Ban all Cryptocurrency Trading


Thursday marked a volatile day of trading in the digital currency space, with bitcoin under pressure, and Ripple and Ether coins suffering losses, after reports that South Korea plans to ban all cryptocurrency trading.

The bitcoin spot price BTCUSD, +2.45% was recently down 7.9% to $13,713.85, having tapped an intraday low of $12,845.71, according to CoinDesk data. Those levels haven’t been seen since late December, and the cryptocurrency remains well below a recent all-time high above $19,000 hit in mid-December.

Bitcoin futures for January BTCF8, +2.95% on the CME dropped 5% to $13,720, and on the Cboe, bitcoin futures XBTF8, +3.08% saw a similar drop to $13,700.

Among other cryptocurrencies, Ripple sank 9.2% to $1.73, while Ether coins on the Ethereum blockchain slid 11.5% to $1,193.37, according to data.

“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” South Korea’s Minister of Justice Park Sang-Ki said at a news conference Thursday, according to the ministry’s office, Reuters reported.

The decision was made after discussions with the country’s finance ministry and regulators, the report said. But even if a bill is drafted, the process of getting the votes needed to approve it could be lengthy and could even take years.

Meanwhile, two of South Korea’s biggest exchanges, Coinone and Bithumb, were raided by police and tax authorities this week, according to the Reuters report.

Korean clampdown, conflicting reports
Major cryptocurrencies pulled back from deeper earlier losses, as another report emerged that possibly not all Korean government officials were on board a ban. The South Korea Ministry of Strategy and Finance, a key member of the governments task force to regulate the sector, reportedly told local press that it doesn’t agree with the views of the Ministry of Justice.

That report was cited by Joseph Young, an Asia-based finance and cryptocurrency analyst and contributor to CoinTelegraph, a blockchain and crypto news service.

South Korea is an active region for investing in virtual currency, and news of stepped-up scrutiny there has been hitting the overall market in recent days. Young also pointed out the government has been preparing a closure bill since mid December, to shut down any exchange not adhering to regulations.

On Monday, digital currencies took a hit on reports South Korean regulators would begin inspecting commercial banks to ensure they were complying with anti-money-laundering regulations.

Shortly afterward, CoinMarketCap dropped Korean exchanges from its aggregate digital currency valuations, which are used to track the price of thousands of those assets. South Korean exchanges have persistently shown the price of cryptocurrencies as higher than on other marketplaces, according to CoinDesk.

Scrutiny has also increased elsewhere. China authorities have ordered the closure of cryptocurrency mining operations, while in the U.S., regulatory authorities have been persistently warning about the investment risks and the sector. That U.S. scrutiny has led to a number of bitcoin exchange-traded-fund applications being pulled in recent days.

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