Bitcoin Tumbles After South Korea Prepares Bill To Ban Crypto Trading, Raids Largest Exchanges For Tax Evasion

Update: Reuters is now piggybacking on the previous report from Bloomberg, with the news that South Korea’s justice ministry said on Thursday it was preparing a bill to ban cryptocurrency trading through its exchanges.

"There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” said Park Sang-ki at a press conference, according to the ministry’s press office.

He added that he cannot disclose details about the proposed shutdown of virtual currency exchanges but will jointly work with the government task force.

Ripple is down 25% today and now down 20% YTD...

 

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EARLIER:

While the earlier report  from Bloomberg that South Korea is preparing a Crypto-exchange shutdown bill has yet to be confirmed, moments ago Reuters reported that in the latest crackdown against thr frothy sector, South Korea’s largest cryptocurrency exchanges, including Bithumb and Coinone, were raided by police and tax agencies this week for alleged tax evasion.

An official at Coinone, one of the country's largest crypto exchanges, told Reuters that "a few officials from the National Tax Service raided our office this week." He added that "local police also have been investigating our company since last year, they think what we do is gambling,” said the official, who spoke on condition of anonymity. He said Coinone was cooperating with the investigation.

On Wednesday tax authorities also raided, Bithumb, the second largest virtual currency operator in South Korea.

"We were asked by the tax officials to disclose paperwork and things yesterday," an official at Bithumb said, requesting anonymity due to the sensitivity of the issue.

To be sure, this is not the first time the South Korean government has cracked down on potential money-laundering and tax evasion. Authorities previously said they are inspecting six local banks that offer virtual currency accounts to institutions, amid concerns the increasing use of such assets could lead to a surge in crime.

The crackdown on Seoul-based operators of some of the world’s busiest virtual currency exchanges comes as the government attempts to calm frenzied demand for cryptocurrency trading in Asia’s fourth largest economy.

Two weeks ago, the entire sector plunged following news that South Korea would require cryptocurrency transactions to name participants and ban banks from offering virtual accounts, and that the government may also direct law enforcement officials to close some exchanges.

Separately, Bloomberg reports that officials at South Korea's Justice Ministry are looking at various steps to regulate cryptocurrencies due to their “seriousness and riskiness,” a spokesman says by phone. SBS TV earlier reported the ministry will begin discussions with other ministries as early as this week after preparing a bill that would shut down cryptocurrency exchanges

As a result of Bitcoin’s record surge last year, demand for cryptocurrency in South Korea has exploded, drawing college students to housewives and sparking concerns about a gambling addiction. We profiled the plight of the nation's bitcoin trading addicts in "A Stunning Look Inside The World Of South Korea's "Bitcoin Zombies".

For now, the double whammy of news out of South Korea has had a modest impact on cryptocurrency prices, but nowhere near the 40% plunge observed two weeks ago.

 

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Comments

JamesBond Sabibaby Thu, 01/11/2018 - 00:49 Permalink

There's that word 'currencies' again.  That was their big mistake.  You can't legally mock up a ten dollar bill and try and pass it off as real (i.e. counterfeiting); it dilutes the value of the 'real' currency.  At the same time, you can't allow a completely different currency into the system as this dilutes the purchasing power of the original currency even beyond the outrageous financial machinations of the FED. 

In reply to by Sabibaby

bwh1214 jeff montanye Thu, 01/11/2018 - 07:01 Permalink

Really, the crypto bashers are trying to declare victory.  This happened with China just a few months ago.  Tell me was that a buying or selling opportunity?

Of course this is going to have a huge effect while the Korean and Japanese exchanges are the main operators.  Now that the American exchanges are waking up we're seeing a reversal. 

Those of us who have bought crypto for our crisis portfolio, the 20, 50, 100x return has been a bonus.  We haven't even seen the crisis yet.  

Why do you think the Japanese, and Japanese govt has embraced this more than any other developed nation?  They want something to fall back on because they are the furthest down the long term debt cycle path, it will result in a reset, period.  Crypto as well as gold silver, alcohol, and maybe bullets and firearms will benefit. 

In reply to by jeff montanye

floosy JamesBond Thu, 01/11/2018 - 02:06 Permalink

Bullshit.  Look up the definition of fiat currency.  A currency is whatever two parties use to perform a trade. You shouldn't need the governments permissions

The fucking governments and their bankster buddies have been counterfeiting for hundreds of years.

PS Nobody is mocking up a dollar bill and passing it off as real, that's the fed's job

 

Fukc off you government shill/slave.

In reply to by JamesBond

new game JamesBond Thu, 01/11/2018 - 06:47 Permalink

one big fuken DUH, and some here thought the guv.org structures were going to let this happen. lol. taxes on gains. huh, how about uuuuuge loses by year end. will loses be allowed if banned, another lol...

this is a threat to guv.org. who is in control? cog dis bigtyme.

ps. i hate guv.org, but reality is a bitch.

 

In reply to by JamesBond

bitzager new game Thu, 01/11/2018 - 08:13 Permalink

Crypto is undercover "Dollar Shredder" FED operation.. If they do it on the Equity Market then that will hurt economy.. Too many Dollars in circulation, how to destroy it? You got your answer, but at the moment total crypto Value is too low for them to pull the plug ones it hits few Trillion $ then they will shredded and forget it: remember? "From dust to dust"? You got it...

In reply to by new game

Disgruntled Goat Throat-warbler… Thu, 01/11/2018 - 01:05 Permalink

One of the most corrupt governments in the world, yet they're concerned about BTC ... recall that in 2017, the President was convicted of corruption and was ousted from office .... she subsequently would not vacate the Presidential palace and had to be forcibly removed by police ....  the CEO of Samsung was also recently charged with embezzlement .... what happenned was that Crypto exploded so fast that they didnt have time to arrange for the proper flow of graft to elected officials, so now they want to walk it back a bit .... what a larf

In reply to by Throat-warbler…

Rhetorical Cognitive Dissonance Wed, 01/10/2018 - 23:06 Permalink

We do not know what our chances of survival are, so we fight as if they were zero. We do not know what we are facing, so we fight as if it was the dark gods themselves. No one will remember us now and we may never be buried beneath Titan, so we will build our own memorial here. The Chapter might lose us and the Imperium might never know we existed, but the Enemy - the Enemy will know. The Enemy will remember. We will hurt it so badly that it will never forget us until the stars burn out and the Emperor vanquishes it at the end of time. When Chaos is dying, its last thought will be of us. That is our memorial -carved into the heart of Chaos. We cannot lose, Grey Knights. We have already won."

In reply to by Cognitive Dissonance