South Korean authorities are reportedly introducing curbs on the trading of cryptocurrencies like bitcoin within the country.
Reuters is reporting that South Korea’s government is weighing in with new rules on the country’s cryptocurrency trading market that is firmly among the largest in the world.
While unverified by CCN.com at press time, the Reuters report cites the government as stating:
The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility.
The government’s statement also noted premiums in prices of cryptocurrencies traded on South Korean exchanges compared to other global counterparts. As reported by CCN.com yesterday, South Korean investors are paying up to 12% and 16% in premiums for trading Ripple and Monero respectively, due to a lack of supply in a market that is seeing soaring demand among retail investors for cryptocurrencies.
“Officials share the view that virtual currency trading is overheating irrationally … and we can no longer overlook this abnormal speculative situation,” the government statement added, according to AFP.
The new restrictive curbs will reportedly include a ban on opening anonymous cryptocurrency accounts to crackdown on money laundering and financial fraud.
“We will…resolutely respond to such crimes by slapping maximum sentences possible on offenders,” the statement reportedly added, adding authorities would “leave all policy options open, including closure of a cryptocurrency exchange when deemed necessary.”
New laws will bestow regulators with the authority to shutter cryptocurrency exchanges, if needed, the government added. This particular hardline ban was recommended by the justice ministry, according to today’s statement. Earlier this month, the justice ministry prosecutor in charge of cryptocurrency-related crimes claimed the measure is to protect retail investors from potential scams.
The official stated at the time:
We do not rule out an option that bans trading of [all] cryptocurrencies. We acknowledge many problems stemming from the trade and are studying how to control them.
Further, all anonymous traders’ accounts currently in use will be closed next month, according to the AFP report.
The reported curbs come within days off South Korean authorities conducting onsite inspections of multiple domestic bitcoin exchanges following the December 19th hack of Youbit, a Seoul-based exchange that declared bankruptcy soon after.
Featured image from Shutterstock.
Last modified: May 21, 2020 11:22 AM UTC