Bitcoin resumed its tumble on Thursday after South Korea said it was eyeing options including a potential shutdown of at least some cryptocurrency exchanges to stamp out a frenzy of speculation.
South Korea has been ground zero for a global surge in interest in bitcoin and other cryptocurrencies as their prices surged this year, prompting the nation’s prime minister to worry over the impact on Korean youth. While there’s no immediate indication Asia’s No. 4 economy will move to shutter exchanges that have accounted by some measures for more than fifth of global trading, the news poses a warning as regulators the world over express concerns about private digital currencies.
Bitcoin fell as much as 7.2 percent to as low as $14,102 in Asia trading, erasing modest gains after the South Korean release, composite Bloomberg pricing shows. It’s now down about 25 percent from its record high reached last week.
South Korea will require real-name cryptocurrency transactions and impose a ban on the offering of virtual accounts by banks to crypto-exchanges, according to a statement from the Office for Government Policy Coordination. Policy makers will review measures including the closure of crypto-exchanges suggested by the Ministry of Justice and take proper measures swiftly and firmly while monitoring the trend of the speculation.
“Cryptocurrency speculation has been irrationally overheated in Korea,” the government said in the statement. “The government can’t leave the abnormal situation of speculation any longer.”