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South Korea says it will decide on what to do about crypto exchanges after talks

  • Last week, South Korean Justice Minister Park Sang-ki said the government was preparing a bill to ban trading via cryptocurrency exchanges
  • South Korea has been trying to rein in speculative cryptocurrency trading in recent months, as interest in the market has exploded
A screen shows the prices of bitcoin at a virtual currency exchange store in Seoul, South Korea.
Seung-il Ryu | NurPhoto | Getty Images
A screen shows the prices of bitcoin at a virtual currency exchange store in Seoul, South Korea.

South Korea will make a decision on a proposed ban on cryptocurrency exchanges after "sufficient consultation and coordination of opinions," the country's government said Monday.

Last week, South Korean Justice Minister Park Sang-ki said the government was preparing a bill to ban trading via cryptocurrency exchanges. Two of the country's largest crypto exchanges, Coinone and Bithumb, were also raided on the day Park's comments were made.

"The proposed shutdown of exchanges that the justice minister recently mentioned is one of the measures suggested by the justice ministry to curb speculation. A government-wide decision will be made in the future after sufficient consultation and coordination of opinions," the country's Office for Government Policy Coordination said in a statement, according to South Korean news agency Yonhap.

This clarification on the government's stance follows comments last Thursday from South Korean Finance Minister Kim Dong-yeon, who said that the issue required more consultation from relevant government departments.

"All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation," Kim told reporters, according to news agency Yonhap.

"The issue of banning exchanges that the justice minister talked about yesterday is a proposal by the Justice Ministry and it needs more coordination among ministries."

South Korea has been trying to rein in speculative cryptocurrency trading in recent months, as interest in the market has exploded. In September, the Financial Services Commission said it would ban a controversial crowdfunding practice in the cryptocurrency space known as initial coin offerings (ICO). ICOs are a means of fundraising for start-ups, who raise money by selling off new virtual currencies in return for other more established ones like bitcoin and ethereum.

Major cryptocurrencies including bitcoin and ethereum are priced significantly higher in South Korea's exchanges compared to the rest of the world. Industry website CoinMarketCap said last Monday it had excluded some South Korean crypto exchanges from its data due to this "extreme divergence in prices."

Bitcoin, ethereum and other major digital currencies fell after reports of a ban on cryptocurrency trading first circulated. The price of bitcoin was seen to recover slightly Monday, trading 0.39 percent higher on CoinDesk at $13,671.55 a coin. CoinDesk's bitcoin price index tracks prices from digital currency exchanges Bitstamp, Coinbase, itBit and Bitfinex. Ethereum on the other hand was down 3.93 percent, trading at £1,312.97 a coin.