April 25, 2018

Bitcoin plunges on fears South Korea will shut exchanges

30 December 2017, 12:55 | Kenneth Drake

Bitcoin plunges on fears South Korea will shut exchanges


The South Korean government on Thursday announced its plans to impose more regulations to curb speculation in cryptocurrency trading in the country, Reuters reported.

The announcement likely contributed to the price of the best known cryptocurrency, bitcoin (BTC) to drop more than 11% or $1,000 this morning.

As part of what appears to be a series of updates created to improve oversight of industry practices, the government will also seek to bar banks from issuing new virtual accounts to cryptocurrency exchanges. In early December, the New York Times spoke with a 77-year-old South Korean man who said he hoped to make up for the money he lost in the stock market years ago, by speculation on various cryptocurrencies.

Authorities have also pointed out premiums in prices of cryptocurrencies traded on South Korean exchanges compared to other global counterparts.

LTCUSD 271217
Bitcoin plunges on fears South Korea will shut exchanges

Both investors and exchanges seem skeptical about a complete trading ban here considering daily transactions have already reached a whopping 7 trillion won.

According to a report on the AFP, government officials in the country are concerned that virtual currency trading is overheating irrationally and it isn't possible for them to overlook this abnormal speculative situation. According to the Wall Street Journal, the government's new measures will ban anonymous accounts being used on exchanges and will require banks to keep records of the identities of customers when it handles settlement services for cryptocurrency trades.

The craze and frenzy surrounding cryptocurrencies is so high that Bitcoin was trading at over 30% premium in the country when compared to the global rates. "We can not leave the abnormal situation of speculation any longer". However, this is surely not the first time that we have witnessed this kind of reaction in the Bitcoin price.

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