South Korea Is Considering Shutting Down Several Cryptocurrency Exchanges

Bitcoin continued to fall this week amid talks of a potential exchange shutdown in South Korea.

The rumors stem particularly from Bitcoin’s seemingly unstoppable surge, particularly in Asian countries such as China, Japan, and South Korea. Now it seems that South Korea’s minister is considering a potential shutdown of several cryptocurrency exchanges due to growing fears of how the digital currency could impact Korean youth.

Bitcoin stocks plummeted 9 percent to $13,828 in Asia trading, however, the digital currency somewhat recovered its footing in London. As of 12.09 p.m London time, the cryptocurrency was down 7.4 percent to $14,059.

According to a statement issued by the Office for Government Policy Coordination, South Korea will announce a ban on the offering of virtual accounts by banks to crypto-exchanges.

Bitcoin has been trading at an estimated 30 percent premium over standard international rates on Thursday in Seoul, a prevalent symptom of the digital currency’s popularity among Asian traders.

“Cryptocurrency speculation has been irrationally overheated in Korea,” said the government in a statement. “The government can’t leave the abnormal situation of speculation any longer.”

The statement came several days before a smaller South Korean exchange called Youbit, announced it would file for bankruptcy after their systems were breached by hackers. South Korea’s security blamed the attack on its northern counterpart, according to the BBC.

South Korea noted that exchange prices were often higher than any other western exchanges. This comes as no surprise, considering that the country was considered by many to be the ground zero of the cryptocurrency surge. According to a recent study conducted by the job portal, Saramin, three out of ten salaried workers in South Korea have invested in cryptocurrencies.

Stephen Innes, head of trading for Asia Pacific at Oanda, states that regulators worldwide will need to face the potentially catastrophic impact of a complete drop in cryptocurrency.

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