It could take years for South Korea to ban bitcoin trading

It could take years for South Korea to ban bitcoin trading

News of the ban follows the raiding of local cryptocurrency exchanges by police and tax authorities over alleged tax evasion, as one of the key nations driving the demand for bitcoin and other virtual currencies attempts a clampdown.

South Korea's justice minister said a bill is being prepared to ban all cryptocurrency trading, Reuters reported Thursday, citing Yonhap.

Any bill to ban trading would need to pass the National Assembly, a process that could take many months or years. 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. Some compare it to gambling which could attribute to South Korea's substantially higher exchange prices. Last September, South Korea banned initial coin offerings, and then in December, the government proposed legislation that would limit how traditional banks would interact with cryptocurrency.

Bitcoin dropped as much as 12% to $12,801, before paring the loss to about 5% at 9.10am NY time, according to data compiled by Bloomberg. In Dec. 2017, the country made it more hard to trade cryptocurrencies anonymously, threatening the possibility to ban cryptocurrency trading altogether.

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Many people on Twitter are convinced that these quotes are being taken out of context by the mainstream media and that the South Korean government wants to further regulate but not ban cryptocurrency trading entirely. Right after the announcement, the most popular Bitcoin tumbled 20 percent from a day before. Ripple trimmed its 21% tumble to a 14% drop, while ethereum slumped 5%.

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

On Wednesday, the nation's financial regulators have inspected banks that allow corporate customers to open virtual accounts on concerns such accounts could be used to circumvent a law banning them from attracting new investors for cryptocurrencies.

The decision comes after several government measures, including real-name transactions, have had little impact in cooling the overheated virtual money market here, the world's third-largest in terms of trading volume.

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There are more than a dozen cryptocurrency exchanges in South Korea, according to the Korea Blockchain Industry Association.

Police have been investigating Coinone's margin-trading service since past year, according to an official who asked not to be named citing policy.

"We were asked by the tax officials to disclose paperwork", an official at Bithumb said, requesting anonymity due to the sensitivity of the issue.

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