A recent dip in bitcoin prices has the markets worried. While an early positive trend was forming earlier today - the markets have suddenly crashed and the price is back to the 12,000s. This fall in Bitcoin prices is being attributed to South Korea's plans of banning cryptocurrency trading.
South Korean government recently executed a major crackdown on the cryptocurrency exchanges in the country. Offices of all major cryptocurrency exchanges were raided by the country's tax department and police. These raids were carried out to check for alleged tax evasion. Corruption is a major problem in South Korea - the recent presidential scandal where the Samsung heir was jailed was the biggest such scandal, after which the government has been very cautious.
South Korea is one of the biggest countries when it comes to the cryptocurrency markets. A significant volume of cryptocurrency trade comes from this country.
Justice minister Park Sang-ki commented that the government of South Korea is soon about to introduce a bill which will ban trading of all cryptocurrencies on domestic exchanges. A China-like situation might be on the rise. Last year, China had banned all their domestic cryptocurrency exchanges in September.
“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” said Park at a press conference, according to the ministry’s press office.
However, if at all such a bill does come up, it is unlikely to go into effect immediately. A bill that is proposed in the South Korean parliament needs a majority vote share to be passed by the national assembly of 297 members. This process can take several months and maybe even years.
South Korea has over a dozen cryptocurrency exchanges. Almost all of them were raided over the past few hours - including Coinone and Bithumb which are among the largest of the lot. The South Korean finance ministry has been working towards ways of taxing cryptocurrencies - the markets of which have become almost as large as Korea's small-cap kosdaq index.