BITCOIN and other cryptocurrencies are facing a crackdown in South Korea but one crypto boss has said regulators must not do a blanket ban on the digital currencies.
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South Korea is home to one of the largest bitcoin exchanges, being the third biggest market in the world for bitcoin trading.
Demand and prices have reached a huge premium of 40 percent in South Korea. But Government officials have been signalling plans to crack down on the crypto trading.
CIO of one of South Korea’s largest cryptocurrency funds #HASHED has warned that a straight ban on all cryptocurrencies is a bad idea.
Crypto boss Hwisang Kim told CNBC: “Banning cryptocurrencies is not a good idea. So I hope current Government could understand what each production is and how important it is.”
Bitcoin price raised as high of $20,000 in December but it took a plunge following an announcements by regulators across the world to crack down on the crypto world.
South Korea has suggested taxing bitcoin profits and curbing anonymous transactions in an effort to tackle underage children and potential criminals from using the digital currency.
South Korea’s huge bitcoin premiums currently offers global traders with the opportunity to take advantage of the price difference between the two markets.
Bitcoin trader Clayton Aitchison said: “In comparison to the USA, sometimes cryptocurrency was at a 40 percent premium here.”
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“You bought cryptocurrency in the USA and transferred it to Korea and when you did that you made 40 percent on your money.”
But Mr Aitchison said the new plans for a clampdown on cryptocurrency investing is now making trading more difficult.
Mr Aitchison said his account has at point been frozen amid a crackdown on South Korea’s cryptocurrencies. He said: “Some of our money was being held in a bank because they wanted to make sure, when those regulations came down, some of the money actually got frozen and the reason they did that was to ensure that companies weren’t doing illegal things and using Korea as a mechanism to do that.”