South Korea planning to close cryptocurrency exchanges, bitcoin dives

Bitcoin Seoul

The crackdowns in South Korea will have an impact on investor activity in cryptocurrencies, and the market knows it. Ripple buying in the South Korean won can be as high as 33 percent, depending on the day.

"There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges", South Korean Justice Minister Park Sang-ki said in a news conference today, according to Reuters. However, Ethereum's price remained more than 8 percent lower, while Bitcoin's value was down by more than 3 percent.

Traders said XRP was the most severely affected by CoinMarketCap's removal of South Korean prices because it was trading at a 50 per cent premium in that country.

Following Choi's press conference, one financial regulator speaking on condition of anonymity said, "Choi's comments can be seen as a declaration of intent for all related government organizations to beef up investigations into cryptocurrency exchanges".

Once enforced, South Korea's ban "will make trading hard here, but not impossible", said Mun Chong-hyun, chief analyst at EST Security.

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At around 4.50 a.m. London time, a few minutes after news, over $106 billion of value was wiped off of the entire cryptocurrency market when compared to the market capitalization at the beginning of the day on Thursday. This is because many exchange sites do not allow any new accounts. South Korea alone has more than a dozen exchanges specializing in the trading of cryptocurrencies, according to Reuters. The exchanges that were removed from the price calculation included Bithumb, Korbit and Coinone.

Long thought to despise the cryptocurrency which undermines its control over the economy, China has already shut down local exchanges, banned initial coin offerings, and is now looking to shut down Bitcoin mining. He said his government is working on a bill that will effectively halt cryptocurrency trading in "domestic exchanges".

The commission added that, since much of the cryptocurrency trading was being done anonymously, users must use their real names.

With fellow exchange Bithumb also falling under the crosshairs of the National Tax Service, industry insiders believe these developments are a harbinger of what is to come, namely a surge in government examination of cryptocurrency exchanges.

Bitcoin exposed stocks in South Korea took a major hit after the announcement.

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