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South Korean government considering crypto crackdown

South Korean government considering crypto crackdown

South Korea is considering clampdown on Bitcoin and crypto trading exchanges across the country. The government of South Korea has announced that it will soon force people to trade Bitcoin and other crypto currencies under their names. The effect of the announcement was seen on the price of bitcoin which took a tumble.

The country has emerged as a hotbed for Bitcoin trading. The Bitcoin trading in South Korea accounts for nearly 20 percent of the global transactions. About one million South Koreans, a majority of them small-time investors, reportedly own Bitcoin.

The move is seen as an effort to cool the overheated market. It is expected that the government might follow the announcement with the introduction of more measures “to stem speculative trading” such as shutting down some Bitcoin exchanges. Local companies providing settlement services for digital currency transactions might also be stopped from doing so.

According to the government, the new rules will bring crypto currencies in line with other financial products in the country. The move will make it easier for the government to track transactions — and tax people, accordingly.

Read: Bitcoin: What's ahead for 2018?

The government’s statement read that the crypto trading has overheated irrationally and it can’t be overlooked anymore. It also stated that all the anonymous accounts that are currently in use would be closed by next month.

The statement underlined that there would be strict action on money laundering activities and financial fraud — including price manipulation — using digital currency trades. Those involved in these activities would be slapped maximum sentences possible.

Two weeks earlier, several financial firms in Seoul were handed bans on dealing crypto currencies, most notably Bitcoin - after the prices soared and sparked concerns of a bubble. The demand of Bitcoin went so high that every unit was traded at 20 percent higher value.

The government officials also sent a warning that the most virtual currencies in the country are being traded at premium prices than elsewhere in the world, and blamed it on “blind speculation”.

Last week, the Youbut exchange declared bankruptcy after being hacked second time in the year. Reportedly, the hacking attack stole 17 percent of its assets. Likewise, there are other incidents and warnings about the blowouts in the crypto market.

The value of one Bitcoin stands at $14,923.70 at the time of writing. According to information on the coinmarketcap website, the crypto currency has recovered in the last 24 hours to register gains of 3.42 percent. The crypto market as a whole has seen a positive trend as well, sitting at a market cap of $581 billion.