Bitcoin prices drop as South Korea minister indicates ban still possible

Prices of bitcoin and other digital currencies fell after South Korea's top financial policymaker said a crackdown on trading of cryptocurrencies was still an option.

Prices of bitcoin and other digital currencies skid after fears of crackdown are revived

The price of bitcoin fell more than seven per cent overnight after news South Korea was still considering a ban.

Prices of bitcoin and other digital currencies have skidded after South Korea's top financial policymaker said Tuesday that a crackdown on trading of cryptocurrencies was still possible.

Finance Minister Kim Dong-yeon said in an interview with Seoul radio station TBS that banning trading in digital currencies was "a live option." He said the decision was subject to a thorough government review.

"There are no disagreements over regulating speculation," such as using real-name accounts and levying taxes on cryptocurrency trading, Kim said. Shutting down digital currency exchanges is "a live option, but government ministries need to very seriously review it," he said.

Bitcoin was trading at $12,615.60 US, down 7.1 per cent from the day before as of 8:03 a.m. GMT, according to Coindesk. The price of ethereum, another digital currency, had slipped 7.8 per cent to $1,190.45 as of 8:04 a.m. GMT.

South Korean officials' remarks have swayed the global markets for bitcoin and other cryptocurrencies in the past few weeks. The country has seen a huge bitcoin craze, with young and old betting on the cryptocurrency to build wealth. The high demand from South Korean investors has created what investors call a "kimchi premium," the extra price the South Koreans have to pay to buy digital currencies, sold in South Korea at higher than the average global prices.

Last week, the justice minister's remark that the country will ban bitcoin and other digital currencies triggered big sell-offs and a public outcry. The presidential office then said that no final decision had been made.

An online petition on the presidential office's website has drawn more than 210,000 requests from people asking the government not to ban trading in digital currencies.

"We the citizens were able to have a happy dream that we had never had in South Korea thanks to cryptocurrency," the petition reads. "You may think you are protecting the public but we citizens think that the government is stealing our dream." 

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