Bitcoin and other cryptocurrencies are getting smoked after a report says South Korea is cracking down on exchanges

Cryptocurrency prices are falling after a Reuters report said the South Korean government is preparing a bill to further crack down on the industry.
Bitcoin is down 5% Thursday morning.
Japan is likely to benefit from crackdowns in South Korea and China.

Cryptocurrency markets around the world were rattled Thursday after a report said that South Korean leaders were preparing a bill to ban cryptocurrency trading. Authorities also reportedly raided cryptocurrency exchanges in the country, according to Reuters.

Bitcoin initially slumped more than 9% Wednesday night on the news, and was still down 8% Thursday morning. Ethereum, the second largest cryptocurrency by market cap, was down 5%. Ripple's XRP, the third-largest, had initially slumped 10%, but then skyrocketed on separate news that the company had partnered with MoneyGram.
In total, the value of all cryptocurrencies has fallen 18% from previous highs reached on Sunday — sitting at $682.44 billion Thursday morning, according to CoinMarketCap.com. The website, one of the most popular for crypto pricing data, caused a stir earlier this week by unexpectedly shifting its data to exclude South Korean exchanges, appearing to show a drop in global prices and inducing some feat selling.

South Korea has been a hot spot for all cryptocurrencies, and the tokens have traded at significant premiums on its exchanges due to tight controls on capital in the country. Bitcoin, for instance, has traded at a more than 40% premium on South Korean exchanges relative to those in the US. According to Josiah Hernandez, chief strategy officer at Coinsource, that demand will make it hard for regulators to follow through on a full ban.
China is also preparing to tighten its grip on the red-hot cryptocurrency space this week, with two of the largest bitcoin mining operations in the country looking to set up shop elsewhere in Singapore, the US and Canada. The country banned wildly popular initial coin offerings, or ICOs, last year.

Japan is likely the beneficiary of crackdowns in other Asian countries. Sebastian Quinn-Watson, an executive at Blockchain Global, told Business Insider this week, "End point, high quality, well-run exchanges will thrive and poorly-run exchanges will perish and the consumer and market will benefit."