Bitcoin prices fall as South Korea says ban still an option

FILE: Finance Minister Kim Dong-yeon said in an interview with local radio station TBS that banning trading in digital currencies was “a live option.” He said the decision was subject to a thorough government review. (Photo by Zach Copley/Flickr, CC BY-SA 2.0)

SEOUL, Korea, Republic Of — Prices of bitcoin and other digital currencies have skidded after South Korea’s top financial policymaker said Tuesday that a crackdown on trading of crypto currencies was still possible.

Finance Minister Kim Dong-yeon said in an interview with local radio station TBS that banning trading in digital currencies was “a live option.” He said the decision was subject to a thorough government review.

“There are no disagreements over regulating speculation,” such as using real-name accounts and levying taxes on crypto currency trading, Kim said. Shutting down digital currency exchanges is “a live option but government ministries need to very seriously review it,” he said.

Bitcoin closed at $10,772.08, down 20.7 per cent from the day before as of 10:15 p.m. GMT, according to Coindesk. The price of ethereum, another digital currency, tumbled 27.8 per cent to $931.79 as of 10:15 p.m. GMT.

South Korean officials’ remarks have swayed the global markets for bitcoin and other crypto currencies in the past few weeks.

The country has seen a huge bitcoin craze, with young and old betting on the crypto currency to build wealth. The high demand from South Korean investors has created what investors call a “kimchi premium,” the extra price the South Koreans have to pay to buy digital currencies, sold in South Korea at higher than the average global prices.

Last week, the justice minister’s remark that the country will ban bitcoin and other digital currencies triggered big sell-offs and a public outcry. The presidential office then said that no final decision had been made.

An online petition on the presidential office’s website has drawn more than 210,000 requests from people asking the government not to ban trading in digital currencies.

“We the citizens were able to have a happy dream that we had never had in South Korea thanks to crypto currency,” the petition reads. “You may think you are protecting the public but we citizens think that the government is stealing our dream.”