The value of Bitcoin has fallen more than $800 overnight, as South Korea has taken steps to regulate the trading of cryptocurrencies.
The government in Seoul will ban anonymous bank accounts from being used to buy and sell digital currencies from the 30th of this month, with the intent of preventing children and known criminals from the market.
Bitcoin has declined in value from just under $11,000 to $10,179 this morning on the back of the news.
Changes to cryptocurrency rules in South Korea, the world's third-largest market for digital coins after Japan and the USA, have an outsize effect on the global trade. Its hands-off laws on trading have attracted investors, and prices tend to be higher in the country than elsewhere.
The move is not an outright ban, as previously feared, but shows that the government is paying attention to the cryptocurrency trade. The country's Justice Ministry has called for more oversight in the market, and is a proponent of the total ban on trading. However, other government departments do not share this view.
"The government is still discussing whether an outright ban is needed or not, internally," a government source told Reuters after a briefing about the news today.
Regulators in other countries, including France and Germany, have also called for a crackdown on trading and have suggested that the topic be discussed at the G20 meeting in March. Their British counterparts have said that they are watching the market.
Starting at the end of this month, criminals, children under the age of 19 and foreigners without local bank accounts will be banned from trading cryptocurrencies. In addition, traders will not be able to make deposits into their virtual currency exchange wallets unless the name on those exchanges matches the name on their bank account, said Kim Yong-beom, vice chairman of the Financial Services Commission.
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