For the second time in a matter of weeks, concerns about cryptocurrency regulation in South Korea have sent the Bitcoin Investment Trust (ticker: GBTC) and other crypto-related investments tumbling. After declaring it will ban all anonymous cryptocurrency trading in December, the South Korean government has now said it is on the brink of banning digital currency trading altogether.
“There are great concerns regarding virtual currencies, and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” South Korea’s Minister of Justice Park Sang-ki says. The latest statements come after the South Korean government called cryptocurrency specutaion “irrationally overheated” in Korea and said it can no longer support the “abnormal situation of speculation.”
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The news sent the price of bitcoin tumbling 7 percent Thursday morning, and investors fear the impact of a total trading ban in one of the largest cryptocurrency markets in the world. South Korea accounts for up to 12 percent of all global bitcoin trading, according to CryptoCompare, trailing only the U.S. and Japan in terms of total trading volume.
Korea isn’t the only government concerned about lack of regulation in the cryptocurrency market. In 2017, China banned initial coin offerings and shut down a handful of popular exchanges. Japan also said its cryptocurrency exchanges must meet cybersecurity standards and verify user identities to be officially recognized by the government.
In the U.S., the Securities and Exchange Commission has yet to approve a bitcoin exchange-traded fund to trade on a major U.S. exchange because of concerns over investor safety.
After a huge year in 2017, the Bitcoin Investment Trust, which trades over the counter, is off to a shaky start to 2018. On Wednesday, Berkshire Hathaway ( BRK.A, BRK.B) CEO Warren Buffett, whom many consider the greatest investor of all time, blasted bitcoin and other cryptocurrencies.
“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said in an interview with CNBC. “If I could buy a five-year put on every one of the cryptocurrencies, I’d be happy to do it.”
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Following Thursday morning’s sell-off, the Bitcoin Investment Trust was down 6.7 percent in January.
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Bitcoin Could Lose a Major Global Market originally appeared on usnews.com
