South Korea, one of the world’s biggest markets for bitcoin trading, announced today that it is drafting legislation to outlaw the practice.
The popular cyptocurrency, which rose more than 1,400% against the dollar in 2017, fell sharply on the news, and is down by around 14% at the time of writing. Until just last month, Asian markets were widely seen to have been caught in a wave of “cryptofever”. With the turning of the year, the fever has decisively cooled, with China banning trading in the currency and now South Korea following suit.
The Financial Times has reported Park Sang-ki, the South Korean justice minister announcing the legislation, explaining: “There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
Part of the reason, according to Park, is that “Cryptocurrency trading becomes akin [to] speculation and gambling . . . it is a risky trading form which can inflict serious financial damage on citizens.”
Meanwhile South Korean authorities are investigating six banks currently offering virtual currency accounts that have possible links to money laundering. The upcoming ban comes as China is trying to close down all bitcoin mining across the country in the wake of Beijing’s own ban on digital currency trading.