South Korean government said it plans to ban cryptocurrency trading, causing a turmoil on the digital currency market, says Reuters.
Tell me more!
Looks like the government is preparing a bill to ban trading of the virtual currency on domestic exchanges. The market reacted quite sharply: Bitcoin price plummeted below $13,000 in the morning of Thursday.
Later, the country’s Presidential office said it was only one of the measures being considered. However, Bitcoin is still in the red zone with the price dropping -2.7% in the past 24 hours.
Why is it important
South Korea’s love-hate relationships with cryptocurrencies are quite curious. Crypto trading is active in the country, and there are over a dozen exchanges working on the market.
To cut the long story of regulation short: in September 2017, South Korea’s Financial Services Commission (FSC) banned all forms of crypto funding (https://t.me/yoken/14). In November, regulators also ruled out Bitcoin futures (https://t.me/yoken/188). However, in December there were rumours about lifting a ban on token sales.
But, most importantly, the regulatory activity in South Korea previously affected Bitcoin prices not only in the country, but across the world.
What can we learn from it
- As usual, nothing is confirmed yet. However, if the rumours of the ban can have a massive impact on market, the actual ban (if it happens) will for sure amplify this impact.
- The threat of crypto trading ban might motivate local investors to cash out, sending the prices of certain currencies down in a short- to mid-term perspective.