Seoul discusses crypto closure

Rising S.Korean virtual crime concerns prompt move

South Korean policymakers joined the global chorus of virtual coin critics on Thursday, saying Seoul is considering shutting down domestic virtual currency exchanges as the new breed of market exposes users to speculative frenzy and crime.

The country’s tough stance comes as policymakers from the US to Germany struggle to come up with stricter regulation against money laundering and other crimes amid the Bitcoin boom.

Responding to questions in parliament, South Korea’s chief of the Financial Services Commission said, “[The government] is considering both shutting down all local virtual currency exchanges or just the ones who have been violating the law.”

Separately, Bank of Korea (BOK) Governor Lee Ju-yeol told a news conference that “cryptocurrency is not a legal currency and is not being used as such as of now.”

Regulators around the world are still debating how to address risks posed by cryptocurrencies, as Bitcoin, the world’s most popular virtual currency, soared by more than 1,700 percent last year.

Prices have plummeted since South Korea announced last week it may ban domestic cryptocurrency exchanges. On Wednesday, Bitcoin slid 18 percent.

According to Bithumb, South Korea’s second-largest virtual currency exchange, the nation’s Bitcoin trading price stood at 13,905,331.4 won ($12,996.73) at 5 pm on Thursday.

On the Luxembourg-based Bitstamp exchange, Bitcoin was trading at $11,750.

Hong Nam-ki, minister of the office for government policy co-ordination, said that opinions on cryptocurrency trading are sharply divided within the government, but vowed to make a decision on regulations during Thursday’s parliamentary session.