On Thursday, Justice Minister Park Sang-ki sent shockwaves through the market when he announced: “There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
The Korean government has since distanced itself from the comments, saying: “All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation.The issue of banning exchanges that the justice minister talked about yesterday is a proposal by the Justice Ministry and it needs more coordination among ministries.”
Price charts covering the past seven days show that Ripple first started faltering on Monday, when its value nosedived from $3.19 at 4.54am to just over $2.60 an hour later.
Ripple executives blamed the sudden drop on cryptocurrency tracker CoinMarketCap’s decision to remove data from South Korean exchanges from its calculations.
XRP is widely traded at a premium in South Korea so the market plunged about 30 percent as a result.
Greg Dwyer, head of business development at cryptocurrency derivatives exchange BitMex, explained: “Every crypto is priced at a 30 percent premium in South Korea.He tweeted at the time: “CoinMarketCap's decision to exclude Korean prices from the displayed XRP price made the price appear to drop, likely triggering some panic selling.
“Look closely at the data and don't be mislead.”
Mr Schwartz later agreed that removing the South Korean market “makes sense” but argued CoinMarketCap should have given prior warning to prevent the market from being spooked.
Ripple continued to slide until Thursday when the company announced a new partnership with MoneyGram, who want to use XRP send money abroad quickly and cheaply.
The digital currency looked to have stabilised at just over $2, until today when it fell to a low of $1.82.