South Korea’s Justice Minister, Park Sang-Ki, has announced plans to ban domestic cryptocurrency exchanges.
“There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges.”
A similar proposal had already been forwarded, placing tight restrictions on cryptocurrency exchanges without banning them outright.
However, it is still uncertain whether the justice minister’s plan is in line with overall government policy. Korea’s government has long expressed concerns over the effect that the recent cryptocurrency boom is having on the country’s youth. A justice spokesperson said the announcement followed consultation with the finance ministry and regulators but no confirmation has come from the President’s office.
Conflicting reports have been coming in over disputes between heads of the exchanges and government officials. A report from Reuters of government raids on Bithumb has been disputed by the exchange.
There is concern about what a government crackdown could do. South Korea has one of the highest demands for cryptocurrencies, with 12 exchanges for the virtual currency. A decline in use could lead to subsequent devaluations.
The news provoked a massive backlash on social media and the Korean president’s website has a petition with over 55,000 signatures. The website received so much traffic that it was periodically unavailable.
At the news, Ethereum slumped by 8% to lows of $1,149.06, XRP to $1.62 and bitcoin by nearly 15% to $12,884.93.
The Tokyo-based exchange Binance, which has already had to move operations from China to Japan, says that tighter government restriction is becoming an issue but has yet to halt interest. Binance CEO Zhao Changpeng said they had halted registration on their website due to high demand. “We opened registration for an hour yesterday and 240,000 users registered.”
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