South Korea’s finance minister on Friday sought to calm the cryptocurrency market after an announcement a day ago that the country’s justice ministry was planning a ban on crypto exchanges, sending prices of digital currencies such as Bitcoin sharply lower.
“The issue of shutting down exchanges, told by the justice minister yesterday, is a proposal by the justice ministry and it needs consultations among ministries,” Finance Minister Kim Dong-yeon said, the South Korean news agency Yonhap reported Friday.
Justice Minister Park Sang-ki had said on Thursday that his ministry was preparing legislation that bans any transactions based on virtual currencies via exchanges due to grave concerns regarding the excessive exuberance in the cryptocurrency market.
Following the news, the price of Bitcoin plunged as much as 14 percent to below $13,000, and over $100 billion was wiped out in market capitalization. As of 4.37 am ET, Bitcoin was down 0.63 percent at $13,500 and Ethereum was lower by 4.01 percent at $1,184.19, on coinbase.
The total market cap was $696.25 billion as of 4.35 am ET on Friday versus $691.00 billion at the same time on Thursday.
The South Korean government has been voicing concerns for the past several months over the cryptocurrency craze, as the currency surge gained steam despite severe falls in between.
The country has witnessed intense interest in cryptocurrencies such as Bitcoin with its citizens, both young and old, investing heavily in these with the hope of making a quick profit.
South Korea hosts several crypto exchanges, but prices of cryptocurrencies in the country tend to be much higher than elsewhere, reportedly over 40 percent, as buyers exceed those willing to sell. Such premium is called “Kimchi premium” in the local media, in an allusion to the famous Korean dish of spicy pickled cabbage.
The justice minister noted that foreign investors are considering the Korean trade in virtual currencies as abnormal due to the excessive prices…