Published: Fri, January 12, 2018
Tech | By Amelia Peters

Shutdown of cryptocurrency exchanges under consideration: minister

Shutdown of cryptocurrency exchanges under consideration: minister

One of the crucial markets for digital currency, South Korea, may become a darksome market in the future as justice ministry of the country gears up to ban cryptocurrency trading and tax authorities raid local exchanges.

South Korea's justice minister said a bill is being prepared to ban all cryptocurrency trading, Reuters reported Thursday, citing Yonhap.

The South Korean government will not impose a ban on cryptocurrency trading after all, contrary to the claims of Park Sang-ki, the head of the Justice Ministry.

Bitcoin as well as other cryptocurrency is now experiencing a huge slumped as South Korea's ministry of justice reemphasized its proposed ban on crypto trading. Bitcoin prices in the country are persistently higher than those in the US.

Earlier on January 11, Justice Minister Park stated that the Justice Ministry is drafting a bill that would effectively ban cryptocurrency trading for both foreigners and citizens.

His remarks sent bitcoin prices plunging 18 percent on South Korean exchange Bithumb, while ethereum slumped 23 percent.

According to CoinDesk, prices of Bitcoin slipped to $13,558.15 (at the time of publishing the article), down 8.95 percent from today's opening price of $14,890.72.

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Cryptocurrency trading in South Korea is very speculative and similar to gambling.

This news had a big impact on the market, as South Korea is home to one of the largest markets for the world's two best-performing cryptocurrencies, Bitcoin, and Ethereum, with some estimates that South Korea accounts on some days for 20% of the total global cryptocurrency market.

On Wednesday, the nation's financial regulators have inspected banks that allow corporate customers to open virtual accounts on concerns such accounts could be used to circumvent a law banning them from attracting new investors for cryptocurrencies. An official at South Korean exchange Coinone said that in addition to the raids, "local police also have been investigating our company since a year ago". This recent news definitely won't quell bubble murmurings any time soon.

The stock of Long Island Iced Tea Corp. soared last month after the company said it plans to change its name to Long Blockchain Corp.

The statement came after hundreds of apparent investors in virtual currency rushed to the website of Cheong Wa Dae, posting more than 1,000 petitions against a possible shutdown of cryptocurrency exchanges.

South Korea is planning to ban the trading of cryptocurrencies like bitcoin through the country's financial exchanges, in a move which could further destabilize the already volatile currency. The exchange, however, denied a Reuters report that its offices had been raided.

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