South Korean authorities to plan Bitcoin ban

Cryptocurrencies Fall As South Korea Moves To Ban Crypto Trading

Cryptocurrencies Fall As South Korea Moves To Ban Crypto Trading

Coinone and Bithumb, two of the country's largest cryptocurrency exchanges, were recently raided by police following accusations of tax evasion.

Markets were in the red across the board during the Asian trading session this morning.

"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 at a press conference, according to the ministry's press office. The justice ministry has been preparing a bill to ban cryptocurrency trading through exchanges after discussion with finance ministry and regulators. A majority vote from the 297-member National Assembly is needed to turn the drafted bill into legislation, and the process could take anywhere from a few months to several years, depending on how contentious the issue is. Due to the volatile nature of Bitcoin's value, however, it's unclear how much of the global drop was related to South Korea's decision. The South Korean won accounts for 10 percent of all trading activity in ethereum and 5 percent in bitcoin.

He pointed to the high premium on digital currencies in the South Korean market, saying that observers overseas have concluded such trading activities are abnormal.

Cryptocurrency prices had already come under pressure earlier in the week after website CoinMarketCap moved to exclude prices from South Korean exchanges from its calculations of digital currency prices, citing "extreme divergence in prices from the rest of the world".

It remains to be seen whether this mass selloff is a direct result of raids in South Korea.

The plan has spurred a backlash on social media, while a petition opposing the measure on the South Korean president's Web site has attracted more than 54,000 names. Korea's government unveiled multiple options for cryptocurrency exchange regulation on December 28, including allowing trading to continue under tighter supervision.

"We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban". Last month, 2% of all South Korean citizens owned at least some cryptocurrency, buying with such frequency that Bitcoin often sells at a 40% higher price there than on US exchanges.

However, Bitcoin then went on to rise higher and more quickly than even some of the more bold analysts could have predicted, reaching to just under $20,000 before the end of 2018 (preceding market corrections).

Reports are emerging of nation-wide police inspections on crypto exchanges in the Southeast Asian nation.

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