On Thursday, the prices of major cryptocurrencies like bitcoin, Ethereum, and ripple took a major hit following the announcement that South Korean legislators are working on a bill to ban cryptocurrency trading in the country.
The news led to a 6 percent loss for bitcoin, 11 percent loss for Ethereum and a 9 percent loss for ripple in just one day.
South Korean Justice Minister Park Sang-ki confirmed that the country is getting ready a bill to prohibit digital coin trading through exchange markets. A few minutes after the announcement, the virtual currency market lost $106 billion in value. Some of the losses were offset in the meantime.
The announcement comes just days after the digital currencies reached historic highs. On January 4, ripple’s value hit a record of $3.84. Since then, it has lost more than 50 percent.
South Korea’s ban is so devastating because the South Korean market is one of the world’s largest trading markets for cryptocurrencies. Around 12 percent of bitcoin trading and 14 percent of Ethereum trading are done in South Korea.
South Korean Regulators Poised to Ban Cryptocurrency Trading
The country did not offer any details on the reasons for the ban. Reuters found that the upcoming bill is the result of “enough discussion” between multiple government agencies like financial regulators and the Finance Ministry.
Bitcoin is often traded at premium prices in South Korea which means that its value on that market is a lot higher than the value on American or European markets. Industry data providers have already removed South Korea from the list of exchanges they use to calculate the value of the digital coins, citing “extreme divergence in prices” when compared with international exchanges.
Other regulators are zooming in on cryptocurrencies worldwide. For instance, in the United States, the Senate Banking Committee will meet with the Securities and Exchange Commission next month to discuss the issue.
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