South Korea is preparing to shut down cryptocurrency exchanges in the country, its justice minister warned today, sending prices of bitcoin and other virtual units into a tailspin.
Separately, one of Korea's biggest cryptocurrency exchanges, Bithumb, said it met briefly with tax officials on Wednesday. Sources in the industry say the NTS move is directly related to the political discussions revolving around cryptocurrency taxation that have been taking place. The proposed legislation will need a majority vote of all 297 members of the National Assembly in order to ban trading outright.
Bitcoin sank on Monday after website CoinMarketCap removed prices from South Korean exchanges, because coins were trading at a premium of about 30 per cent in Asia's fourth-largest economy.
He added that it was a misleading idea that virtual currency trades contribute to the development of blockchain technology.
The U.S. Senate will hold a hearing with the country's top markets regulators to discuss risks posed by cryptocurrencies such as bitcoin, Reuters reported, citing an unidentified person with direct knowledge of matter. Now the South Korean Government has made a decision to ban cryptocurrency trading stating that it is illegal. "Some officials are pushing for stronger and stronger regulations because they only see more (investors) jumping in, not out".
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Most other virtual coins turned bearish.
In fact, earlier this week, industry data provider CoinMarketCap tweeted that it would exclude some South Korean exchanges in price calculations due to the "extreme divergence in prices from the rest of the world" and for "limited arbitrage opportunity". The news follows the news that the country's ban on cryptocurrency exchanges from opening new customer accounts in December 2017, and the incoming ban on anonymous accounts.
One cryptocurrency expert, when asked to comment on the current unfolding of events, said the Coinone and Bithumb investigations may open the floodgates of government inspection.
The nation's tax office and police declined to confirm whether they raided the local exchanges.
Increasing interest has prompted a crackdown by some governments and last week China ordered local authorities...