South Korean government stated it will implement new measures to regulate cryptocurrency trading within the country on Thursday. New regulations would restrict trading through anonymous accounts and could offer power to authorities to close down exchanges.
“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility,” said the government in a statement.
The trading prices of most of the digital currencies have been more in South Korean exchanges than exchanges in any other countries. However, the government has not specified any countries.
The justice ministry of South Korea recommended a measure to close virtual coin exchanges if required. The government announced its plan to impose tax on capital gains from cryptocurrency trading. This step would be taken to counter the risk arising from excessive speculation.
Bitcoin, the world’s biggest and well-known cryptocurrency, has rose by more than 19-fold since January 2017. South Korea is the biggest hub for bitcoin.
The decision of the government affected the price of bitcoin. According to leading industry site CoinDesk, it fell to $13,672.16 on Thursday, which showed decline of 11 percent as compared to the price at the beginning of the day. At 3:42 p.m. HK/SIN, the biggest cryptocurrency rose back to $14,233.60.
This level was still above the low price of $10,400, which it reached last Friday during a session of huge volatile trading.
According to South Korean local news agency Yonhap, the chief of the country’s financial regulation agency opined that the “bubble in bitcoin will burst later.”