The end is here for bitcoin in South Korea, it seems, as Reuters is reporting that the government of the Asian nation has officially decided to ban cryptocurrency trading. Police and tax authorities have reportedly been raiding local exchanges on alleged tax evasion charges.
The news dropped the price of bitcoin overnight, as South Korea was one of the world's most active hubs of crypto activity — and its sudden and unexpected move has left the rest of the world wondering what's next when it comes to how virtual currency is regulated.
“There are great concerns regarding virtual currencies, and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,”Justice minister Park Sang-ki noted of the to-be-presented bill that will ban trading of the virtual currency on domestic exchanges. Korea’s president seemed to soften that a bit later on — after markets had reacted to the news — noting that the ban itself had not yet been finalized and was still only one measure being considered.
The drafting of the bill, however, will not be enough to ban bitcoin in Korea — a majority of the 297 members of the National Assembly will have to vote in favor of it, and that could take months or even years.
But the news was enough to scare the bitcoin community in-nation, as it tipped off a 21 percent price drop within Korea. However, even with that drop in place, bitcoin in Korea was still trading at a 30 percent premium compared to other countries.
And while industry players are understandably less-than-wholly thrilled by the news, Mun Chong-hyun, chief analyst at EST Security, noted that even this ban probably won't completely end the industry in-nation and will instead make trading bitcoin in Korea “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,” Mun said.