Bitcoin prices plummeted following the news that the South Korean government is planning to ban all cryptocurrency trading over concerns that the recent surge in investments which it equates to gambling could lead to a surge in crime.
In addition to announcing that cryptocurrency trading could soon be banned, the country's police and tax authorities raided several of the nation's largest exchanges on charges of tax evasion.
South Korea is following in the footsteps of China (opens in new tab), Vietnam (opens in new tab) and other countries that have banned exchanges at a time when global demand for cryptocurrency has never been higher.
During a press conference on the potential ban, Justice minister Park Sang-ki revealed that the government is currently working on a bill to ban the trading of all virtual currencies on South Korea's domestic exchanges, saying:
“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
However, it could take a great deal of time for the proposed bill to be passed as a majority vote of the National Assembly's 297 members is needed before it could be passed and this process could take months or perhaps even years.
Bitcoin's price dropped by 21 per cent in South Korea following the Justice minister's statement though the cryptocurrency still trades at a 30 per cent premium when compared to its price in other countries.
If the government's proposed bill is passed, it will greatly affect the price of Bitcoin, Ethereum and other cryptocurrencies (opens in new tab) which have become tremendously popular in the country.
Image Credit: Julia Tsokur / Shutterstock