South Korea prepares cryptocurrency trading ban

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Higher interest and higher prices attract more money also into research and making new real-world applications with this technology.

The country's Justice minister Park Sang-ki said the country is preparing a ban on cryptocurrency trading, Reuters reported Thursday. There is a still a process to go through, which entails drafting a bill and getting a majority vote from the 297 members of the National Assembly.

The government's tough stance triggered a selloff of the cryptocurrency on both local and offshore exchanges. Ripple trimmed its 21% tumble to a 14% drop, while ethereum slumped 5%. Vidente and Omnitel, which are stakeholders of Bithumb, skidded by the daily trading limit of 30 percent each. With the turning of the year, the fever has decisively cooled, with China banning trading in the currency and now South Korea following suit. The Financial Services Commission of Korea has previously banned ICOs, trading in bitcoin futures, and anonymous crypto trading accounts.

"Justice Minister Park's comments related to shutdown of cryptocurrency exchanges is one of the measures prepared by the Ministry of Justice, but it's not a measure that has been finalized", a spokesman told reporters in a text message. "The government is examining how much to regulate virtual currency trading", said Jonh-ku. It'll be a lot more hard, however, and many people, hackers included, will likely switch to using exchanges in places like Japan.

But the MSF disagreed, saying, "We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban".

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In South Korea, police and tax authorities raided local exchanges on alleged tax evasion, Reuters reported.

Investors in the country are preemptively reacting to the proposed ban.

In its latest measure to help prevent speculative investment in virtual coins, the government has banned banks from offering virtual accounts, which are needed to sell or buy cryptocurrencies, to individual customers. Over $106 billion of value was wiped off of the entire cryptocurrency market after the news, but it did pare some of those losses major cryptocurrencies are often traded at a premium on South Korea exchanges. Moreover, it created confusion and gave rise to huge selloff among investors. The employee said that the exchange was cooperating with the investigation.

A representative of Bithumb, one of around 20 virtual currency exchanges in South Korea, said the company was watching developments closely.

An unidentified spokesman told the Financial Times: "They asked for some data such as cryptocurrency trading volume, our exchange's sales and whether we are paying corporate tax well".

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