That difference in price is called a "kimchi premium" by many traders.
In fact, earlier this week, industry data provider CoinMarketCap tweeted that it would exclude some South Korean exchanges in price calculations due to the "extreme divergence in prices from the rest of the world" and for "limited arbitrage opportunity." The exchanges that were removed from the price calculation included Bithumb, Korbit and Coinone.
Last month, the South Korean Financial Services Commission said it was prohibiting cryptocurrency exchanges from issuing new trading accounts. If an exchange does allow new accounts, the government has the ability to take action to either stop trading or shut the exchange down, the commission said in a statement.
The commission added that, since much of the cryptocurrency trading was being done anonymously, users must use their real names.
The government also indicated it would closely monitor banks and would "swiftly" step in to limit fund flows into cryptocurrencies if necessary.
Bitcoin exposed stocks in South Korea took a major hit after the announcement. Shares of Omnitel, which has a bitcoin remittance business, crashed 30 percent, Vidente shares tumbled 29.96 percent, Digital Optics fell 13.7 percent and KPM Tech was down 5.48 percent.
That news from the justice minister comes after the country's largest cryptocurrency exchanges were raided by police and tax agencies this week for alleged tax evasion, people familiar with the investigation told Reuters.
—CNBC's Chery Kang, Evelyn Cheng and Reuters contributed to this report.