Bitcoin price falls after South Korea introduces new cryptocurrency rules, considers shutting down exchanges
No more anonymous tradingBy Rob Thubron
South Korea has introduced tighter regulations on the country's cryptocurrency markets, resulting in a drop in bitcoin and ethereum prices. The new legislation will see a ban on anonymous cryptocurrency accounts starting next month.
Right now, most Korean cryptocurrency exchanges require only a name and email before trading is allowed. The exception being if large sums are involved. This anonymity is set to be banned as per the "know your customer" rules designed to prevent money laundering. Furthermore, cryptocurrency exchanges will be monitored going forward.
South Korea's Justice Ministry is even considering closing all the country's crypto exchanges, according to the Wall Street Journal. Exactly how and when this might happen wasn't made clear, but it was enough to affect bitcoin and Ethereum prices, which dropped 12 percent and 8 percent, respectively, in the wake of the news, though both digital currencies have recovered slightly.
Korea has the third-largest cryptocurrency market in the world after the US and Japan. Its government, which noted that crypto trading prices are often much higher in the country than on other exchanges, is trying to regulate the rampant speculation.
"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 said in a statement. Prime Minister Lee Nak-yeon added that crytpocurrencies could "lead to some serious distorted or pathological phenomenon."
Earlier this month, South Korea proposed a series of new rules to tackle the bitcoin frenzy. They included stopping foreigners, financial institutions, and minors from trading crypto, and levying capital-gain taxes for trades made on exchanges.