Published: Fri, January 12, 2018
Hi-Tech | By Preston Stone

Bitcoin falls after threat of ban from South Korea

Bitcoin falls after threat of ban from South Korea

Legislation imposing a ban will be subject to a majority vote of the 297-member National Assembly. Last month, 2% of all South Korean citizens owned at least some cryptocurrency, buying with such frequency that Bitcoin often sells at a 40% higher price there than on USA exchanges.

A series of measures have failed to curb overheated virtual currency speculation in the country and Park said it would be "devastating if the bubble bursts".

Park Nok-sun, a cryptocurrency analyst at NH Investment & Securities, said the herd behaviour in South Korea's virtual coin market has raised concerns.

A survey conducted by the Income Tax Department has revealed that there are six lakh active traders of cryptocurrencies such as Bitcoin in nine digital currency exchanges across India, while 25 lakh people are registered to trade, The Indian Express reported on Thursday.

On global exchanges the price of bitcoin surged in 2017 from a low of around $750 in early January to a record above $19,500 in mid-December before tumbling, according to Bloomberg News. It accounts for somewhere in the region of 6 percent to 12 percent of bitcoin trading, according to industry website CryptoCompare. The exchange disputed a Reuters report that its offices had been raided by tax and police agents.

More importantly, the South Korean cryptocurrency exchange market is processing a daily trading volume that is twice larger than the country's main stock market KOSDAQ.

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Once enforced, South Korea's ban "will make trading hard here, but not impossible", said Mun Chong-hyun, chief analyst at EST Security.

"Some officials are pushing for stronger and stronger regulations because they only see more (investors) jumping in, not out", Park said.

Under the measure, only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals, while the issuance of new virtual accounts to cryptocurrency exchanges will be banned. This leads to market crash in recent times.

On Wednesday, billionaire investor Warren Buffett said that he would never invest in bitcoin or other cryptocurrencies and predicted the wildly popular assets are in for a fall.

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

At around 4.50 a.m. London time, a few minutes after news, over $106 billion of value was wiped off of the entire cryptocurrency market when compared to the market capitalization at the beginning of the day on Thursday.

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