SEOUL: Bitcoin fell more than 11 per cent after South Korea said on Thursday it would ban anonymous trading of virtual currencies and crack down on money laundering activities using them.
The announcement came as the hyper-wired South emerged as a hotbed for cryptocurrency trading, accounting for some 20 per cent of global bitcoin transactions — about 10 times the country’s share of the world economy.
The new rules announced by Seoul include a ban on opening anonymous cryptocurrency accounts and new legislation to allow regulators to close virtual currency exchanges if necessary.
“Officials share the view that virtual currency trading is overheating irrationally ... and we can no longer overlook this abnormal speculative situation,” the government said in a statement.
All anonymous accounts currently in use will be closed next month, it added.
The policy package also includes stepping up crackdowns on money laundering activities and financial fraud — including price manipulation — using digital currency trades.
“We will ... resolutely respond to such crimes by slapping maximum sentences possible on offenders,” it said, vowing to “leave all policy options open, including closure of a cryptocurrency exchange when deemed necessary.”
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.
The digital unit hit a record around $19,500 earlier this month, meaning it had increased more than 25-fold from its 2017 low in mid-January.
About one million South Koreans, many of them small-time investors, are estimated to own bitcoin. Demand is so high that prices for the unit are around 20 per cent higher than in the US, its biggest market.
Seoul also warned on Thursday that most cryptocurrencies are being traded in the country at prices far higher than elsewhere in the world, blaming factors including “blind speculation”.
The price of bitcoin fell 11.6 per cent to $13,827 after Thursday’s announcement.
In a case highlighting the risks of cryptocurrency, a Seoul virtual currency exchange declared itself bankrupt last week after being hacked for the second time this year.
The Youbit exchange became the first South Korean cryptocurrency exchange to close after the hacking attack that stole 17 per cent of its assets.
There have been numerous warnings about a possible blowout in the bitcoin market.
India’s first bitcoin trading app launched
NEW DELHI: At a time when bitcoins are in focus also for the wrong reasons, cryptocurrency dealer Pluto Exchange on Thursday announced the launch of India’s first mobile application for transacting in virtual currencies.
At a press conference, Pluto Exchange founder and Chief Executive Bharat Verma said his company is all set to launch the country’s first app-based wallet that enables bitcoin transactions using a mobile number.
“The Pluto Exchange mobile app offers a solution to the coordination problem between payment processors, financial gateways and banks,” Verma said.
“All other apps already in the market do transactions using bitcoin addresses, which are long and prone to error while copying. Pluto Exchange will change this scenario by enabling transactions using mobile numbers only, which are just 10 digits,” he said.
By using a four-digit personal identification number (PIN), users can now buy, sell, store and spend bitcoins via a mobile number, Verma added.
Elaborating, he said the app would permit a range of transactions, including payments, remittances, business-to-business commerce, supply chain finance, asset management and trading.
He also said that the Reserve Bank of India is concerned about the use of cash for dealing in virtual currencies, whose values have turned volatile recently.
-IANS