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12 Jan, 2018 09:39

No cryptocurrency ban: South Korea backtracks after wave of criticism

No cryptocurrency ban: South Korea backtracks after wave of criticism

There will be no cryptocurrency trading ban in the short-term in South Korea, the Finance Ministry said on Friday. The announcement contradicts an earlier statement from the Ministry of Justice, which had prompted a mass sell-off.

"All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation," FInance Minister Kim Dong-yeon told reporters, as quoted by the news agency Yonhap.

"The issue of banning exchanges that the justice minister talked about yesterday is a proposal by the Justice Ministry and it needs more coordination among ministries," Kim added.

Friday’s news comes after a major wave of criticism was aroused in South Korea following the previous day’s announcement by the Ministry of Justice, stating its plans to ban cryptocurrency trading. It seems the Ministry of Justice acted independently and without the consent of other government agencies.

More than 60,000 Koreans have signed a petition against the mooted cryptocurrency trading ban and for the dismissal of the head of the Ministry of Justice Park Sang-ki, who announced the upcoming ban. South Korea is one of the largest hubs for cryptocurrency mining and trading.

The largest cryptocurrency, bitcoin, was trading flat on the news at $13,822, still more than 30 percent down on its $20,000 peak of December 17.

Cryptocurrency trading in South Korea is highly speculative, resembling gambling closely even by financial standards, and tokens like bitcoin and ethereum are priced far higher than on other exchanges.

For example, bitcoin was trading near $18,000 on Korean exchange Bithumb, a 33 percent difference compared with other exchanges. Coinmarketcap, one of the most renowned cryptocurrency indices, has removed a group of Korean exchanges from its data set because of the difference.

In December, South Korea announced it was banning cryptocurrency exchanges from issuing new trading accounts. If the ruling is violated, the exchange can be shut down, the authorities said. The South Korean commission added that all cryptocurrency trading should be done under individuals’ real names.

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