Bitcoin, Ethereum, Ripple and Litecoin prices plummet as South Korea announces ban on cryptocurrency trades

The proposed ban comes after police and tax authorities reportedly raided local exchanges this week over alleged tax evasion.

 THE price of Bitcoin and other cryptocurrencies dropped sharply this morning after South Korea announced plans for a trading ban.The move comes after police and tax authorities reportedly raided local exchanges this week over alleged tax evasion. 

 Bitcoin fell more than 10 per cent from over $15,000 (£11,100) to around $13,300 (£9,800) in the early hours of this morning, before recovering slightly.Ripple and Litecoin also suffered loses due to the announcement.On the back of it Ethereum slumped 23 per cent, although it's currently trading about 0.83 per cent down on yesterday.Justice Minister Park Sang-Ki said Seoul was preparing a bill to shut down the country's virtual coin exchanges. 

 "The ministry is preparing legislation that basically bans any transactions based on a virtual currency through the trading floor," he told journalists.Authorities had "grave concerns" over the craze and were "aiming to close virtual currency exchanges" in the country, he said."It has started to resemble gambling and speculation," Park added, citing the fact that bitcoin prices are higher in South Korea than globally -- the so-called "kimchi premium".A representative of Bithumb, one of around 20 virtual currency exchanges in South Korea, said the company was watching developments closely."We're closely monitoring government moves. We have nothing further to say at this moment", she told AFP.Earlier this week, cryptocurrency market crashed by £102BILLION instantly after CoinMarketCap - arguably the industry's most prominent global index - suddenly removed a group of Korean exchanges from its price calculations. 

 Bithumb was raided by tax authorities on Wednesday who inspected the company's documents.On the same day financial authorities inspected six local banks that offered virtual accounts for corporate customers.Last month Seoul banned its financial firms from dealing in virtual currencies.Two weeks later, it announced a ban on opening anonymous cryptocurrency accounts and a crackdown on money laundering activities using them.It has also warned most cryptocurrencies were being traded in South Korea at far higher prices than elsewhere in the world, blaming factors including "blind speculation".Play VideoCEO of Ripple, Brad Garlinghouse, explains how he sees the future for his cryptocurrency and its rival BitcoinUS billionaire investor Warren Buffet told CNBC on Wednesday the global craze over bitcoin and other cryptocurrencies would meet a "bad ending"."In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," he said, but added: "When it happens or how or anything else, I don't know."On global exchanges the price of bitcoin surged in 2017 from a low of around $750 in early January to a record above $19,500 in mid-December before tumbling, according to Bloomberg News.