(Repeating story to fix typo in headline)
SEOUL, Dec 29 (Reuters) - Hackers have stolen millions, lawmakers are pushing for new taxes and regulations, and a leading financial official has called them a "Ponzi scheme".
But that hasn't cooled a frenzy for bitcoin and other virtual currencies that is gripping young investors in South Korea.
On a recent weeknight at Sungkyunkwan University in Seoul, more than a dozen students crammed into a classroom to share tips on investing in so-called cryptocurrencies, which have driven tales of fantastic returns for savvy investors.
The group sat in rapt silence broken only by a sudden shout of "there was just a big jump!" from someone monitoring his virtual currencies - as one student gave a presentation on how to read financial data and predict future trends.
"I no longer want to become a math teacher," said 23-year-old Eoh Kyong-hoon, who founded the club, Cryptofactor. "I've studied this industry for more than 10 hours a day over months, and I became pretty sure that this is my future."
Driven in part by a dismal economic outlook including an unemployment rate almost three times the national average - young South Koreans are flocking to virtual currencies despite the risks and warnings from officials, analysts say.
It's a trend that has caught the eye of South Korean leaders and regulators, who announced new measures this week to regulate speculation in cryptocurrency trading within the country.
Concerns about security and thefts of cryptocurrencies by hackers have also been rising. A South Korean cryptocurrency exchange recently shut down and filed for bankruptcy after being hacked for the second time this year.
"Young people and students are rushing into virtual currency trading to earn huge profits in just a short period of time," Prime Minister Lee Nak-yeon said in November. "It is time for the government to take action as it could lead to serious pathological phenomena if left unchecked."
Eoh said the talk of more regulation had not dented his plans, especially after making what he said was a 20-fold gain on his investments over the past six months.
He said that many students were bringing laptops to class to track the movements of their investments and participate in actual trading. "Even when professors are giving lectures right in front of them," he said.
Younger investors have especially gravitated toward so-called "altcoins", or virtual currencies other than bitcoin, which often trade at much lower values, analysts say.
"Since young people are more mobile-friendly, they can actually make more out of altcoin investments as long as they are able to discriminate gems from pebbles," said Kim Jin-hwa, one of the leaders of the Korea Blockchain Industry Association, an association of 14 virtual currency exchanges.
Iota, one of the fast-gaining altcoins, was traded at $0.82 in late November, but now stands at $3.89, a gain of 374.4 percent, according to Coinmarketcap.com. Energo (TSL), another type of altcoin, gained 400 percent during the same period.
Some young investors say they don't sleep until after 2 a.m., when there is a lull in the cryptocurrency markets as investors in places like South Korea and Japan log off.
Members of the club say they call each other to make important decisions together, and see information sharing as key to navigating the volatile cryptocurrency markets.
"I literally knew nothing about cryptocurrencies or the economy," said Lee Ji-woo, a 22-year-old sports industry major. "Everyone here has taught me a lot."
It's now emboldened her to dream of a different future.
"I can have two jobs maybe, one as an athlete and another as an investor," she said.
Intense competition for jobs in South Korea is likely helping to drive interest in virtual currencies among young South Koreans, especially as they see others reaping big gains, said Shin Dong-hwa, head of the Korea Blockchain Exchange.
"Whenever they go onto social network services, they are easily exposed to so many examples of young people around their age earning huge money," he said.
But some in South Korea's financial establishment say those hopes may be unfounded.
Kim Yong-beom, vice chairman of the Financial Services Commission, said Monday that the only reason prices were going up was because each investor expected the next buyer down the line to pay a higher price. "That really is a Ponzi scheme," he said.
Others say students seem more focused on ways to get rich quick rather than on the underlying financial or technological values of digital currency.
"There's no way to measure their true value yet but students are just going for them, believing that they can earn a big fortune in just a snap," said Yun Chang-hyun, economics professor at the University of Seoul.
Members of Cryptofactor, however, say they founded the club because of a lack of dedicated cryptocurrency classes on campus and see their efforts as a way to move beyond speculation to informed investing.
"I realised that I was actually speculating rather than investing before I came to this club," said Kim Myung-jae, a 19-year-old fine arts student, adding that she was especially attracted to altcoins.
"Now that I fully discuss which one to invest in with the members, I'm actually looking at the true value." (Additional reporting by Yuna Park, Cynthia Kim; Writing by Josh Smith; Editing by Philip McClellan)