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Bitcoin could lead kids into illegal activities like drug dealing, South Korean prime minister warns

  • Rising interest in cryptocurrencies could push children into illegal activities like drug dealing, South Korean Prime Minister Lee Nak-yeon said
  • He said that there are cases of young Koreans looking to make "quick money" from digital currencies like bitcoin

Rising speculation on cryptocurrencies like bitcoin could cause kids to get into crime such as drug trafficking or pyramid schemes, South Korea's prime minister said Tuesday.

In a statement posted after a cabinet meeting, Prime Minister Lee Nak-yeon warned on the dangers of virtual currencies.

"There are cases in which young Koreans including students are jumping in to make quick money and virtual currencies are used in illegal activities like drug dealing or multi-level marketing for frauds," Lee said, according to a translation by CNBC.

The South Korean leader called on government agencies such as the Ministry of Justice, to look into the issues.

"This can lead to serious distortion or social pathological phenomena, if left unaddressed," he said.

Bitcoin trade in the South Korean won accounts for about 18 percent of the total market, according to data from industry website Cryptocompare.

South Korean regulators have been quite cautious on cryptocurrencies. In September, the country's Financial Services Commission banned new initial coin offerings (ICOs). This is a fundraising tool used by cryptocurrency start-ups where people invest digital currencies into a company in exchange for a newly-created virtual token. The investors don't hold a stake in the company.

However, interest in cryptocurrencies from South Koreans continues to rise. On Bithumb, the largest cryptocurrency exchange by trade volume, bitcoin was priced above $10,000 on Tuesday. In comparison, bitcoin was trading at $9,915 on U.S.-based exchange GDAX.