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South Korean officials plan to ban all domestic cryptocurrency exchanges

South Korean officials plan to ban all domestic cryptocurrency exchanges

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The ban triggered a drop in South Korean cryptocurrency prices

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An image of the Bitcoin logo on a gold coin surrounded by other coins
Illustration by Alex Castro / The Verge

South Korean officials announced today that they’re preparing a bill that will completely ban domestic cryptocurrency trading. In response to the news, the price of bitcoin in South Korea dropped by $2,000 this morning.

“There are great concerns regarding virtual currencies,” explained justice minister Park Sang-ki, at a news conference attended by Reuters. The move comes after the prices of bitcoin, Ethereum, and other top digital currencies were priced higher in South Korean exchanges compared to the rest of the world.

South Korea’s tough stance on cryptocurrency isn’t new. Last September, South Korea banned initial coin offerings, and then in December, the government proposed legislation that would limit how traditional banks would interact with cryptocurrency. In its statement from December, the government hinted at the idea of an outright ban of cryptocurrency exchanges. At the time, China was the only country to have banned digital currency exchanges, and it was only with the heavily monitored Chinese Firewall that it was able to do so.

It’s also a multi-pronged effort to police cryptocurrency in South Korea: a few days earlier, police and tax collecting agencies raided the country’s largest digital currency exchanges on the grounds of alleged tax evasion.

The ban may not happen right away, if at all. A few hours after the officials’ announcement of a planned ban, the South Korean presidential office clarified later that the ban had not been finalized yet. If a bill is drafted, it would still require a majority vote from the 297 members of the National Assembly, which could take months, or even longer.