Korea Cracks Down on Bitcoin Trading

South Korea Tightens Crypto Net

Bitcoin climbed as much as 8.3% in Asian trading, before dropping back to trade 5.1% higher at $14 536 at 9.04am in London, composite Bloomberg pricing showed.

As part of what appears to be a series of updates created to improve oversight of industry practices, the government will also seek to bar banks from issuing new virtual accounts to cryptocurrency exchanges. "The government can't let this abnormal situation of speculation go on any longer", the South Korean government said in a statement, as reported by The New York Times. "I may have missed the Bitcoin boat but new boats are coming and I want to hop on those", he told the Times. Many of them believe that there is a huge bubble in the market and this can burst at any point in time.

This makes regulators in South Korea nervous.

The South Korean government said that it will impose tougher measures to crack down on cryptocurrency trading in the country.

Bloomberg News reported that South Korea will require cryptocurrency transactions to name participants and ban banks from offering virtual accounts. While bitcoin's debut on regulated derivatives exchanges in Chicago was thought to have given it a new mainstream channel for investors to tap, so far trading volume has been limited. The government may also direct law enforcement officials to close some exchanges.

"Cryptocurrency speculation has been irrationally overheated in Korea", the government said in a statement (as quoted by FT). "They are anxious about giving a wrong perception to the people". Since then, it slumped to $US11,589 ($14,864) and has bounced around between those extremes for days. Moreover, with an unprecedented surge in the cryptocurrency trading, South Korea's Prime Minister has expressed a strong worry over its impact on the Korean youth.

He added Bitcoin's recent drop was largely expected, saying investors may see more and more volatility next year, given the lack of liquidity in the market.

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