Bitcoin has tumbled after South Korea announced new rules for trading.
In order to curb the widespread speculation growing amongst investors, the new regulations could include the prohibition of anonymous trading accounts operating within the country with authorities having the right to even shut down exchanges if needed.
The uncertainty about regulating the cryptocurrency trading in South Korea has been looming for quite a long time and it seems the government has now finally decided on a crackdown.
“Cryptocurrency speculation has been irrationally overheated in Korea”, the government said in the statement.
All anonymous accounts now in use will be closed next month, it added.
“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility”, the government said in a statement.
As part of what appears to be a series of updates created to improve oversight of industry practices, the government will also seek to bar banks from issuing new virtual accounts to cryptocurrency exchanges.
The announcement came two weeks after Seoul banned its financial firms from dealing in virtual currencies, most notably bitcoin, as their prices soared, sparking concerns of a bubble largely fuelled by retail speculators.
Bitcoin resumed its slide Thursday, dipping below $14,000 as the cryptocurrency’s dizzying drop from a record set 10 days ago intensified.
Following this news, the Bitcoin price has plunged by more than 11% in the past 24 hours and is now trading at $14375.70, according to CoinMarketCap.
The measures have been floated as part of efforts to stamp out market speculation in a country that is believed to make up a significant portion of global cryptocurrency trading.
Currently, many cryptocurrency exchanges (including South Korean ones like Kucoin) allow trading with little more than your name and an email.
The Youbit exchange became the first South Korean cryptocurrency exchange to close after the hacking attack that stole 17 percent of its assets.
Bank of Japan governor Haruhiko Kuroda said last week that the price surge of the virtual currency was “abnormal”, while Singapore’s central bank advised investors to “act with extreme caution”.