Bitcoin plunges on fears South Korea will shut exchanges

Markets Insider

• Bitcoin drops below $14,000 in overnight trading on statement from South Korean government that trading is “overheated.”
• The crypto currency recovered but is still down more than 7% on the day.

Bitcoin plunged below $14,000 after the South Korean government warned it may close some cryptocurrency exchanges amid “irrationally overheated” trading.

Bloomberg News reported that South Korea will require cryptocurrency transactions to name participants and ban banks from offering virtual accounts. The government may also direct law enforcement officials to close some exchanges.

“Cryptocurrency speculation has been irrationally overheated in Korea,” the South Korean government said in a statement reported by Bloomberg. “The government can’t leave the abnormal situation of speculation any longer.”

Here’s the chart as of 8:20 a.m. UK time:

Markets Insider

South Korea is an important market for cryptocurrency trading. Mati Greenspan, an analyst with trading platform eToro, said in an email this month: “Recent estimates state that 21% of all global BTC volume are done in Korean Won.”

Earlier in December, South Korean officials reportedly banned local finance firms from handling bitcoin futures, one of the hottest new financial products to launch in years.

South Korea has taken a tough stance on digital currencies,banning initial coin offerings (ICOs) earlier this year. ICOs involve startups issuing their own digital currencies to raise funds.