Cryptocurrency is going to face a major hit (especially Bitcoin) soon, thanks to South Korea’s impending ban. The Minister of Justice Park Sang-ki said that a bill to ban all cryptocurrency trading is being prepared.
Yesterday, local police and tax authorities raided Korean exchanges on account of alleged tax evasion which added fuel to the fire.
Not Finalized yet
The Minister said in a press release,
There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.
The bill was finalized after discussion between the finance ministry and other finance regulators.
After the bill is drafted, all 297 members of the South Korean National Assembly need to vote in its favor for it to be passed as legislation. This could take months or potentially years.
The bill hasn’t been finalized yet, but that hasn’t stopped Bitcoin’s value in South Korea from crashing.
Bitcoin Falling
Following the news, Bitcoin’s price in South Korea fell by 21% in the country, trading at 18.3 million won ($17,064.53). Note that the currency trades at an average of 30% higher price in Korea when comparing to CoinDesk’s average price.
This large difference in prices has prompted CoinMarketCap (a crypto data resource) to announce that they’re going to exclude prices from some of the Korean exchanges.
Prices fell elsewhere as well. At a Luxembourg based crypto exchange, Bitstamp, Bitcoin’s price decreased by 10% getting to $13,199. Earlier, it fell to as low as $13,120 the lowest since January 2nd.
“Herd Behavior”
Bitcoin’s astronomical rise last year (around 1500%) has prompted many to invest in it, including students. Park Nok-sun, cryptocurrency analyst at NH Investment & Securities in South Korea says,
Virtual coins trade at a hefty premium in South Korea, and that is herd behavior showing how strong demand is here. Some officials are pushing for stronger and stronger regulations because they only see more (investors) jumping in, not out.