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Bitcoin Struggles as South Korean Ban Pushes Forward

12 January 2018

Park said he could not disclose details but would jointly work with a government task force to shut down virtual currency exchanges in South Korea, which is one of the world's biggest markets for the likes of bitcoin and etherum.

The crackdown in South Korea, a vital foundation of the global demand for cryptocurrency, came as policymakers around the world are having a hard time regulating an asset that's value went through the roof a year ago.

The news comes after the South Korean government banned cryptocurrency exchanges from opening new customer accounts in December as it attempted to rein in speculation which has seen prices swing wildly in recent months.

Unlike the raids on currency exchanges, a ban on their operation isn't something that can happen overnight. Ripple's XRP was down about 9 per cent to $1.6 on the Luxembourg-based Bitstamp exchange.

With fellow exchange Bithumb also falling under the crosshairs of the National Tax Service, industry insiders believe these developments are a harbinger of what is to come, namely a surge in government examination of cryptocurrency exchanges.

The Chairman of the FSC held a press briefing on January 8, 2018, to further shed more light on the inspection and other vital issues about regulation of cryptocurrencies.

Two of the largest exchanges in the country, and the rest of the world, were raided by police and tax inspectors this week.

Park Nok-sun, a cryptocurrency analyst at NH Investment & Securities, said the herd behaviour in South Korea's virtual coin market had raised concerns.

Start your workday the right way with the news that matters most. That created confusion and triggered a broad selloff among investors. While the authorities are taking care of the legal side of the things, the nation's police are proceeding to the actual exchanges located in the country.

"Local police also have been investigating our company since previous year, they think what we do is gambling", a Coinone employee told Reuters. Earlier this week, South Korean authorities said they were also inspecting six local banks that provide virtual-currency accounts to institutions, checking whether they were requiring real names for accounts and following rules against money laundering.

Bitcoin Struggles as South Korean Ban Pushes Forward