Cryptocurrency Prices Plunge as South Korea Looks Set to Ban Trading
South Korea has announced curbs on cryptocurrency speculation contributing to a massive slide in value of all major coins. Ethereum dropped roughly 14% in value in 24 hours while bitcoin slumped to lose around $2000 USD according to data from Coindesk. Bitcoin is currently trading at $11, 601 USD. XRP also plummeted dropping as low as $1.32 USD.
South Korea to crack down illegal trading
South Korea announced yesterday it will come down hard on any illegal cryptocurrency trading and that it is still considering a full shutdown of cryptocurrency trading in the country.
South Korea has been one of the leaders of the emerging financial sector and this announcement has impacted the value of both big name currencies, Ethereum and Bitcoin. Despite the potential ban the South Korean government has announced it is dedicating resources to support research and development into blockchain technologies on which cryptocurrencies are based.
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.