Officials in South Korea have declared that they are preparing a bill that will ensure a total ban on cryptocurrency trading. As an immediate result on this news, the price of bitcoin declined by $2,000.
Speaking on this new development, Justice Minister Park Sang-ki stated, “There are great concerns regarding virtual currencies.” This decision was taken after it was found that the prices of cryptocurrencies like bitcoin, Ethereum, and some of the top digital currencies were capped at a very high rate in South Korean exchanges, unlike other countries.
The firm decision of South Korea on cryptocurrency is not without warning. In fact, last September, the country put a total ban on initial coin offerings. Furthermore, in December, the government proposed legislation restricting how traditional banks are supposed to interact with cryptocurrencies.
The government had earlier indicated possibilities of an outright ban of cryptocurrency. While South Korea has made this announcement, China is the only country to have put a complete ban on digital currency exchanges in place. China was successful in doing this through heavily monitored firewalls.
The effort to stop cryptocurrency and trading around it is a multi-pronged effort by the police in South Korea. Previously, the police department and tax collection agency in South Korea conducted an extensive raid on one of the largest digital currency exchanges in South Korea; they were accused of tax evasion.
However, sources indicate that the ban may not be in effect immediately. Within a few hours of the official announcement of the ban, the South Korean presidential office clarified that the ban has not been finalized. Once a bill is drafted, it needs a majority vote from the 297 members of the National Assembly. This process can take months or longer.