The bitcoin market and cryptocurrency markets in general react very strongly to news, especially when it concerns regulations and new laws. This has been the case multiple times in the past and has happened again in the last few days. News from South Korea have been negative concerning bitcoin, as the Ministry of Justice said it wanted to ban cryptocurrency trading on exchanges and that a bill was currently being written. In addition, many of the country’s exchanges have been questioned by the government regarding tax evasion accusations.
As a result, cryptocurrency markets took a hit, and prices fell considerably since the news came out. Like it usually is the case, the bitcoin price dictates the rest of the cryptocurrency market, and altcoins follow its activity. Bitcoin fell to $13,158 at some point in the last 24 hours, according to website CoinMarketCap, days after reaching $15,000 again. It has been a tough month for bitcoin, as it received a lot of negative press and many doubters came after the digital currency. In December 2017, bitcoin reached an all-time high of $20,000, but has had trouble reaching those levels ever since.
The reason why cryptocurrency markets were so affected by this news is because South Korea is one of the countries that is the most interested in bitcoin and that has the most investors and traders in the world. Bitcoin trades at a much higher price there compared to other nations, and interest in cryptocurrencies keeps increasing.
Multiple media outlets such as CNN, Reuters, CNBC and more rushed to report the news that South Korea was banning bitcoin trading altogether. However, it turns out that the news of a ban was blown out of proportion and that there was disagreement within the government.
Park Sang-ki, the South Korean Attorney General claimed in a press conference that “There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges”. Hours after the news broke, South Korean officials denied that a trading ban was in the works and explained that no decision had been finalized. The Ministry of Strategy and Finance immediately released a statement declaring that nothing had been agreed upon and that it had heard about the Ministry of Justice’s proposal through news outlets. The statement also claimed that the Ministry of Finance disagrees with the potential ban – “We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban”. A petition has been circulating asking for the removal of the head of the Ministry of Justice after the fiasco.
This event shows how rumors can spread quickly and that it is always important to check sources and verify the accuracy of reports. It also reaffirms the volatility aspect of the cryptocurrency markets.
TLDR: Rumors were spread that South Korea was drafting a bill to ban cryptocurrency trading in the country. As a result, the cryptocurrency market crashed, but it turned out to be unconfirmed news. The South Korean Ministry of Finance later denied the claims.