The price of bitcoin has dropped significantly following new reports that authorities in South Korea might ban the trading of cryptocurrency exchanges.
As mainstream news outlets started reporting on comments made by the South Korean Minister of Justice, Park Sang-Ki, that a bill is being prepared to ban the trading of cryptocurrencies, the price of bitcoin fell from $14,932 at 12:04am BST on January 11 to $12,884 by 4:20am BST, according to data from CoinDesk.
At the time of writing, 5:55pm BST, the price has recovered to $13,746, which is still a 7.5% decline in the overall value compared to this earlier high.
Ethereum, after initially gaining in price following the news reports, soon followed a similar trajectory.
At 12am BST on January 11, it went from $1,247 up to $1,337 by 1:10am BST, only to then fall down to $1,149 by 4:55am BST. After a day of fairly volatile trading it is at $1,235 at the time of writing, a 7.6% decline from the earlier high.
Since the initial reports, there have been conflicting stories about the future of cryptocurrency trading in South Korea.
News1, a South Korean news website, claimed that the presidential office has said that any potential bill banning cryptocurrency trading has not been finalised.
Reuters cited a press official at the Justice Ministry as stating that the proposed ban was announced after “enough discussion” with other government agencies including the nation’s finance ministry and financial regulators. However, the same article also noted that even if such a bill were drafted, it would require the majority vote of the 197 members of the National Assembly and claimed that this process could “take months or even years”.
Adding to the confusion, a Forbes article is being widely shared on Twitter today with the headline “South Korea Is Not Banning Bitcoin Trade, Financial Regulators Clarify”.
But the article was actually published on December 12, 2017, and doesn’t actually cite any government officials stating that cryptocurrency trading will not be banned. Instead, it simply says that the chairman of the Financial Services Commission, Choi Jong-ku, confirmed that “any decision to prohibit transactions must have a legal basis”.