South Korea looks to ban Bitcoin trading

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11 Jan, 2018

South Korea looks to ban Bitcoin trading

A probe into alleged tax evasion has already seen South Korean officials conduct several raids on Seoul cryptocurrency exchanges, whilst the country’s justice minister said that virtual currency is of “great concern” to the administration.

Spearheaded by Bitcoin, 2017 was the year in which virtual currency took the world by storm with people from all backgrounds wanting to be part of this new wave. 2018 will perhaps be the year in which governments start to really take note.

Bitcoin’s surge last year saw it rise to $16,000 but the virtual currency has also experienced volatility, dropping and rising dramatically from one day to the next. This is due to the still relatively low levels of trading and number of people with Bitcoin despite its increasing popularity.

A select few people have a relatively large share of bitcoin compared to normal traders, meaning that any move they make (i.e. cash out) will have a big impact on the bitcoin market, making it susceptible to wild price swings.

Furthermore, its success has seen a rise in many first-time traders. However, the concept is still relatively new with many people are still trying to come to grips with it. This had led some to believe that inexperienced investors are developing a gambling addiction as they try to ride the wave, adding to its volatility.

The South Korean Government is also concerned about tax evasion, resulting in several crypto-raids, including the country’s second-largest virtual currency operator, Bithumb.

"We were asked by the tax officials to disclose paperwork and things yesterday," an unnamed official told Reuters.

A South Korean justice minister Park Sang-ki explained: "There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges". 

The South Korean administration had already announced in December that it would apply more scrutiny to exchanges, including a crackdown on anonymous trading.

Bitcoin fell 7% to just under 13,800 on Thursday although it is not yet clear whether that has anything to do with news from South Korea. Despite its attempts to crackdown, it remains to be seen whether South Korea will outright ban cryptocurrency activity.

However, one thing looks certain, virtual currencies are here to stay and look set to only get bigger as more people sign up whilst a growing number of outlets accept cryptocurrencies as legal tender.

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