SOUTH KOREAN GOVERNMENT OFFICIALS have confirmed that they are working on plans to ban cryptocurrency trading throughout the country.
Cryptocurrency prices plunged in response to the news as South Korea, along with China, has become one of the centres of the cryptocurrency boom.
The country's government is looking to clamp down on cryptocurrencies following a boom in initial coin offerings (ICOs) and trading of cryptocurrencies in the country. Part of the reason for the clampdown, suggests the government, is the challenge of regulating the sector and, in particular, the use of cryptocurrencies for tax evasion.
South Korea's police and tax authorities have launched a number of raids on cryptocurrency exchanges, claiming that they are being used for money laundering and tax evasion.
The country's justice minister, Park Sang-ki, announced the news this week. He said his government is working on a bill that will effectively halt cryptocurrency trading in "domestic exchanges".
"There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges," he said.
The South Korean government has been working on plans for a potential ban on cryptocurrency trading for some time now. And according to a press official, there's been "enough discussion" around the topic.
There have been high-level talks between a range of government agencies, including the finance ministry and regulators. However, for the bill to pass in the National Assembly, the government will need to secure 297 votes.
After the news was confirmed, South Korean cryptocurrency prices plunged by around 21 per cent. By midday, they were trading at around 18.3 million won ($17,064.53) after the minister's comments.
Mun Chong-hyun, an analyst at EST Security, told Reuters that this decision "will make trading difficult here, but not impossible.
"Keen traders, especially hackers, will find it tough to cash out their gains from virtual coin investments in Korea but they can go overseas, for example Japan." µ
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