Cryptocurrency Prices Plunge as South Korea Looks Set to Ban Trading

Last Wednesday, it was revealed by Justice Minister Park Sang-ki that the government was preparing a law to close all the nation’s exchanges. Senior official Jung Ki-joon said: “We will respond strongly to cryptocurrency speculation and illegal acts, but we will provide support to research and development relating to blockchain technology. The proposed shutdown of exchanges that the justice minister mentioned recently is one of the measures suggested by the justice ministry to curb speculation.” 

South Korea looks to regulate

The South Korean government has had an uneasy relationship with cryptocurrency since the craze swept the country. Last week two of the countries biggest trading platforms Coinone and Bithumb were raided by government-sanctioned authorities. Finance minister Kim Dong-yeon appears open to finding middle ground between a total closure and a rampant unregulated market. He said: “All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation.” Until the South Korean government makes a final decision on its stance, cryptocurrency markets are likely to keep falling as traders sell in anticipation of market closure. 

China increases cryptocurrency restrictions

China is also seeking to curb the country's crypto craze. China produces the most bitcoin in the world using bitcoin mining, an energy-heavy process that involves producing blockchain to add to the public ledger by solving complex maths problems. The Leading Group of Internet Financial Risks Remediation has requested that local governments make an “orderly exit” from the industry. While the government has previously expressed concerns over the amount of energy required to maintain bitcoin mining operations, it seems the latest crackdowns are more closely tied to the issue of security rather than resource management. Chinese financial regulators have identified links between cryptocurrency trading and malicious activities like money laundering and fraud. In reaction to this, some cryptocurrency exchanges have been forced out of operation and fundraising through initial coin offerings (ICOs) has been banned. Chinese authorities have just announced they will also block cryptocurrency platforms that permit centralized trading. It is likely more and more countries will begin to regulate cryptocurrency within their own borders potentially causing an even more unstable market until these measures are installed.