Cryptocurrencies Fall As South Korea Moves To Ban Crypto Trading

Cryptocurrencies Fall As South Korea Moves To Ban Crypto Trading

The market for digital coins was under intense pressure Thursday morning amid reports that South Korea has a bill in the works to ban cryptocurrency trading.

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

At the same time the ban on cryptocurrency exchanges was announced, South Korea's two largest cryptocurrencies were raided by local authorities. At the same time, 5% of all bitcoins are traded against the won after USA dollar.

Indeed, bitcoin's 1,500 percent surge past year has stoked huge demand for cryptocurency in South Korea, drawing college students to housewives and sparking worries of a gambling addiction.

Ethereum, another cryptocurrency hugely popular in South Korea, also fell 14%.

Traders in Asia have a huge influence on crypto currency markets.

Financial Services Commission head Choi Jong-ku foreshadowed the impending wave of government involvement at a press conference on January 8

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

In fact, earlier this week, industry data provider CoinMarketCap tweeted that it would exclude some South Korean exchanges in price calculations due to the "extreme divergence in prices from the rest of the world" and for "limited arbitrage opportunity".

"We were asked by the tax officials to disclose paperwork and things yesterday", the source told Reuters. The source said police have been investigating the company since past year, suspecting their operations of "gambling". The South Korean government is developing a system that seeks to ban the use of anonymous trading accounts according to local press Yonhap News.

"A few officials from the National Tax Service raided our office this week".

The news of the crackdown follows a Wall Street Journal report Monday that regulators in South Korea were preparing a wide-ranging inspection on six commercial banks that manage "virtual" bitcoin accounts.

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