Bitcoin briefly falls 11% after South Korea moves to ban new cryptocurrency trading accounts

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Bitcoin fell Thursday after the South Korean Financial Services Commission took more steps to limit speculation in cryptocurrency trading in the country.

 

The digital currency hit a low of $13,611.86, down 11 percent on the day, according to CoinDesk’s bitcoin price index, which tracks prices from four exchanges. Bitcoin traded near $14,000 midday Thursday, still more than 25 percent below its record high reached this month.

Bitcoin has swung wildly in the last several weeks, reaching an all-time high above $19,800 on Coinbase in mid-December before tumbling to a low of $10,400 on Friday. There was no immediate explanation for the sudden, one-day decline that day.

On Thursday, the South Korean commission said in a statement, translated by CNBC, that it is prohibiting cryptocurrency exchanges from issuing new trading accounts. If an exchange does allow new accounts, the government has the ability to take action to either stop trading or shut the exchange down, the statement said. According to an English language Facebook post by the Commission, the rules would take effect in January.

The commission added that since much of the cryptocurrency trading was being done anonymously, users must now use their real names and anonymous trading is no longer allowed.

The government also indicated it would closely monitor banks and would “swiftly” step in to limit fund flows into cryptocurrencies if necessary.

Earlier this month, authorities in the country had prohibited minors and non-residents from opening accounts.

Bitcoin one-week performance

Source: CoinDesk

Bitcoin trading in South Korean won fell slightly Thursday to about 6 percent of total volume, according to CryptoCompare. The website showed interest from South Korean traders has grown steadily in the last 10 months, sometimes accounting for more than 12 percent of total bitcoin trading volume.

Demand from South Korean investors has also contributed significantly to gains in other cryptocurrencies such as ethereum and Ripple, also known as XRP.

Bitcoin has proved resilient to regulators so far. The digital currency plunged by more than $2,000 in September as China cracked down on digital currencies. But the cryptocurrency has since more than recovered and is up nearly 1,400 percent for the year, according to CoinDesk.

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