Why does South Korea want to ban the use of bitcoin?

South Korea is one of the largest markets for virtual currencies: it is the third country in the world, after Japan and the United States, where most exchanges are generated in bitcoins, the most popular cryptocurrency. But his government wants to stop this trend.

Justice Minister Park Sang-ki announced at a press conference on Thursday that virtual currencies pose "great concerns" for the authorities and said they are preparing "a bill to prohibit the trade of cryptocurrencies through exchanges. "

And it is that the virtual currencies escape to the control of the States and of the organisms in charge of the supervision of the financial markets.

A press official told the Reuters news agency that the measure was taken after having "discussed it extensively" with several government institutions, including the Ministry of Finance and financial control agencies.

The police and prosecutorial authorities of the country began to investigate this Wednesday Bithumb and Coinone, two of the most important houses of sale of bitcoins in the country (and in the world), and raided their main headquarters for alleged tax evasion.

"The virtual currency trade offers huge bonuses in South Korea, and that result shows the herd behavior and how strong the demand is here," said Park Sang-ki.

After the announcement, the value of bitcoin plummeted by 7%, falling below US $ 13,000, although it may not be solely due to it.

On Monday, the director of the Financial Services Commission reported that inspections are being carried out to six local banks that offer accounts in virtual currencies.

"Virtual currencies are currently unable to function as a means of payment and are being used for illegal purposes, such as money laundering, fraud and fraudulent investment operations," said the director of the Financial Services Commission (FSC), acronym in English), Choi Jong-ku.

The cryptocurrencies reached record values ​​over the last year, despite having been involved in a great controversy since the birth of bitcoin, in 2009.

According to data collected by local news agency Yonhap, some two million people in South Korea have virtual currency, which is also a popular means of payment in the country and a way to deposit savings.

According to a recent survey by South Korean job search portal Saramin, 31% of South Korean workers have invested in virtual currency, with an average investment per capita of US $ 5,300.

The trade with cryptocurrencies is managed through Initial Public Offers of Cryptocurrencies (ICO, for its acronym in English). It is estimated that there are about 700 cryptocurrencies in circulation.

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