Bitcoin slips as South Korea announces to regulate trading

6 years ago - Published in Fintech Land

Bitcoin resumed its tumble on Thursday after South Korea said it was eyeing options including a potential shutdown of at least some cryptocurrency exchanges to stamp out a frenzy of speculation.
The price of bitcoin on Thursday afternoon in Seoul fell about 8.5 per cent to Won19.93m ($18.534) on Bithumb, one of the world’s busiest virtual currency exchanges, as traders reacted to the measures. Bitcoin, the world’s biggest and best-known cryptocurrency, has fallen about 28 per cent from its record high reached last week.

“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility,” the government said in a statement.

It noted that trading prices of most virtual currencies were much higher on South Korean exchanges than they were on exchanges in other countries, although it did not provide specific examples.

South Korea will require real-name cryptocurrency transactions and impose a ban on the offering of virtual accounts by banks to crypto-exchanges, according to a statement from the Office for Government Policy Coordination. Policy makers will review measures including the closure of crypto-exchanges suggested by the Ministry of Justice and take proper measures swiftly and firmly while monitoring the trend of the speculation.

South Korea had previously announced its plan to tax capital gains from cryptocurrency trading to tackle what it sees as the risk of excessive speculation.

“Cryptocurrency speculation has been irrationally overheated in Korea,” the government said in the statement, which comes little more than a week after the bankruptcy filing of one South Korean exchange. “The government can’t leave the abnormal situation of speculation any longer.”

Singapore’s monetary authority warned last week that digital currency buyers should be aware they could lose all their money, joining counterparts who’ve warned about speculative mania surrounding bitcoin, which has surged more than 1,300 percent this year. Bitcoin, the world’s biggest and best-known cryptocurrency, has gained more than 19-fold this year.