The South Korean government is reportedly preparing a bill to ban all cryptocurrency trading in the country.
On Wednesday, billionaire investor Warren Buffett said that he would never invest in bitcoin or other cryptocurrencies and predicted the wildly popular assets are in for a fall.
Park also shot down views that the government was excessively intervening in the market, adding that the United States and Japan have also come up with measures to limit transactions.
The justice minister said virtual currencies were causing the government “great concern”. At the time of press, Bitcoin was trading for around $13,350, down from the valuation of roughly $15,000 preceding the revelation of the proposed bans. Closing the exchanges in such a critical market deals a blow to the prices of cryptocurrencies and to the development of the blockchain technology, which needs investment. “But the message is not properly being delivered”, he said.
Cryptocurrencies such as Bitcoin and Ethereum are traded through exchanges, some of which have recently been raided by authorities after allegations of tax evasion.
Governments around the world are increasing scrutinizing crypto trading as surging prices attract everyone from individual investors to Wall Street banks.
“This morning we excluded some Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity”, CoinMarketCap said earlier this week.
Following are the questions and answers during the ministry’s press conference in Seoul. The finance ministry is studying a cryptocurrency tax. If the past is any indication of the future, we might just be able to ride this one out. “Cryptocurrency speculation has been irrationally overheated in Korea”. “They’ll probably convert their money into bitcoin there, and then start trading offshore”. Some compare it to gambling which could attribute to South Korea’s substantially higher exchange prices.
South Korea’s escalation in its position against cryptocurrencies comes after it announced tighter regulations for the trading of bitcoin in late-December. Before that, we will come up with new measures.
Park dismissed views that strengthening the rules amounts to government market intervention, noting that the United States and Japan have maintained their own ways to limit transactions.
Q: How do you respond to any side effects from exchange closure? .
Litecoin will need to hold on to $230 levels to avoid the risk of falling back to sub-$200 levels, which haven’t been seen since a pre-Christmas sell-off.
Exchanges themselves don’t seem to be too moved by the minister’s apparent intention.