South Korea to Ban Anonymous Accounts, Tighten Hold on Exchanges

  • South Korea to Ban Anonymous Accounts, Tighten Hold on Exchanges

South Korea to Ban Anonymous Accounts, Tighten Hold on Exchanges

South Korea is an important market for cryptocurrency trading.

The South Korean government said that it will impose tougher measures to crack down on cryptocurrency trading in the country.

Following the news, Bitcoin's price dropped 11 percent from $15,489 to $13,800, according to Coinbase.

Bitcoin climbed as much as 8.3% in Asian trading, before dropping back to trade 5.1% higher at $14 536 at 9.04am in London, composite Bloomberg pricing showed.

The new rules will target anonymous trading of virtual currencies and crack down on money laundering activities, Seoul said.

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South Korea to Ban Anonymous Accounts, Tighten Hold on Exchanges

Despite the extended fall, the Korean price was still nearly 30 percent higher than global prices, which local traders call "Kimchi Premium" mocking the speculative fever of the market that makes up more than a fifth of global trading.

The crypto currency recovered but is still down more than 7% on the day.

TechCrunch has a slightly different take, suggesting that the move to ban anonymous cryptocurrency accounts will have the fortunate side-effect of making it harder for North Korea to infiltrate the South's crypto markets.

"We will...resolutely respond to such crimes by slapping maximum sentences possible on offenders", the statement reportedly added, adding authorities would "leave all policy options open, including closure of a cryptocurrency exchange when deemed necessary". Speculation remains at the heart of the problem, though, with government officials saying in a statement, "The government can't let this abnormal situation of speculation go on any longer". But they see a price adjustment unavoidable for some time.

Major Asia-Pacific markets play a fateful role in influencing Bitcoin prices, and governments have been watching closely to understand this new type of financial instrument, and keep it from crushing financial stability.