South Korea plans to ban cryptocurrency trading

The South Korean government says it plans to ban cryptocurrency trading, sending bitcoin prices plummeting and throwing the virtual coin market into turmoil. Grace Lee reports.

SEOUL, SOUTH KOREA (REUTERS / KOREA POOL) – Turmoil for the Bitcoin market on Thursday (January 11), as South Korea announces it may ban cryptocurrency trading altogether.

While lawmakers the world over are struggling with how to regulate bitcoin Seoul has been opting to clamp down on trade, worried over its frenzied local popularity.

Its skyrocketing value last year drew students and housewives into investing.

Now, the justice minister says a bill is in the works to put digital coins off-limits.

That’s after police raided local exchanges on alleged tax evasion this week, following moves by the finance ministry to find ways to tax the fast-growing market.

Analysts say it’s the so-called ‘herd behavior’ that has officials worried.

The sheer volume of investors jumping into the market has created a hefty premium for cryptocurrencies in South Korea.

But after the announcement on Thursday (January 11), the price of Bitcoin plummeted as much as 10 percent on the Bitstamp exchange and it’s unclear how a future ban might affect prices.

Korean authorities also say they’re inspecting six local banks that offer virtual currency accounts to institutions saying they’re worried cryptocurrencies could lead to a surge in crime.