South Korea to Tighten Bitcoin Exchange Rules Amid 'Speculative' Boom

South Korea is one of the centers of bitcoin trading in the world with its exchanges accounting for a mammoth share of the global trade in bitcoin, monero, ripple, ethereum among others.

Following this news, the Bitcoin price has plunged by more than 11% in the past 24 hours and is now trading at $14375.70, according to CoinMarketCap.

Today as of 10 AM ET, bitcoin is trading at $14,080.01, according to CoinBase.

The government's ban on using anonymous accounts, effectively a mandate that exchange providers perform know-your-customer (KYC) due diligence, is seen as the latest move to curb the trading activity around cryptocurrencies in the country.

Despite the extended fall, the Korean price was still nearly 30 percent higher than global prices, which local traders call "Kimchi Premium" mocking the speculative fever of the market that makes up more than a fifth of global trading. While bitcoin's debut on regulated derivatives exchanges in Chicago was thought to have given it a new mainstream channel for investors to tap, so far trading volume has been limited. The new regulations banning anonymous accounts should make it harder for the North to turn a profit on cryptocurrency trading.

The crypto currency recovered but is still down more than 7% on the day.

The South Korean government, in a statement, said: "Cryptocurrency speculation has been irrationally overheated in Korea". Speculation remains at the heart of the problem, though, with government officials saying in a statement, "The government can't let this abnormal situation of speculation go on any longer".

This major decision from the Korean government comes in just within two weeks after on the country's local cryptocurrency exchange - Youbit - filed for bankruptcy. However, this is surely not the first time that we have witnessed this kind of reaction in the Bitcoin price.

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