[THE INVESTOR] Prices of Bitcoin and other alternative cryptocurrencies tumbled on Dec. 28 after the Korean government reaffirmed its hardline policy toward the overheated trading fever here, including the adoption of a real-name trading system from next year.
As of 3 p.m., Bitcoin was trading at 19.69 million won (US$18,400), almost a 12 percent fall from a day before, while other popular digital currencies like Ether and Bitcoin Cash saw their prices decline five to 10 percent on the day. Only Ripple gained about 7 percent following news that the token could be used by some Japanese credit card companies in a new partnership.
Earlier on the day, the government decided to ban the use of anonymous virtual accounts for trading from January. Only real-name bank accounts and matching accounts at virtual currency exchanges can be used for deposits and withdrawals.
The government also reaffirmed it is considering a complete ban, including a bill that aims to shut down cryptocurrency exchanges.
“Many of the cryptocurrencies are trading at excessively higher prices in Korea than overseas. People are investing recklessly,” they said in a joint statement. “We will no longer neglect the abnormal situation.”
On Dec. 27, Choe Heung-sik, governor of the nation’s financial watchdog Financial Supervisory Service, also warned against a Bitcoin bubble, saying the price may plunge in the future.
“I bet the Bitcoin bubble will burst soon,” he told reporters. “Companies existed during the IT bubble in the early 2000s, but that is not the case for Bitcoin.”
He made it sure that taxing Bitcoin transactions doesn’t necessarily mean the government is recognizing its legal status, saying: “Like gambling profits, gains from Bitcoin investments will be taxed.”
By Lee Ji-yoon (firstname.lastname@example.org)