South Korea justice minister said on Thursday that a bill is being prepared to ban all cryptocurrency trading in the country.
That news is a major development for the cryptocurrency space, as South Korea is one of the biggest markets for major coins like bitcoin and ethereum.
According to industry website CryptoCompare, more than 10 percent of ethereum is traded against the South Korean won — the second largest concentration in terms of fiat currencies behind the dollar. Meanwhile, 5 percent of all bitcoin are traded against the won.
"There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges," Park Sang-ki said at a press conference, according to the ministry's press office.
Bitcoin tumbles on talk of South Korea preparing a crypto trading ban
13 Hours Ago | 02:59
Bitcoin tumbled more than 12 percent following Park's remarks, before recovering. It was down 0.7 percent on the Coinbase exchange.
Ethereum tanked on the news and remained 7.6 percent lower on Coinbase.
Park added that he couldn't disclose more specific details about a proposed shutdown of cryptocurrency trading exchanges in the country, adding that various government agencies would work together to implement several measures.
Later in the day, South Korea's presidential office said that any potential bill "is not a measure that has been finalized," according to News1, a South Korean news site.
Bitcoin could be the biggest bubble in history Bitcoin could be the biggest bubble in history – here's how
3:48 PM ET Thu, 7 Dec 2017 | 02:00
Reuters further reported that a press official said the proposed ban on cryptocurrency trading was announced after "enough discussion" with other government agencies including the nation's finance ministry and financial regulators.
The newswire later added that once a bill is drafted, legislation for an outright ban of virtual coin trading will require a majority vote of the total 297 members of the National Assembly, a process that could take months — or even years.
Cryptocurrency trading in South Korea is very speculative and similar to gambling. Major cryptocurrencies like bitcoin and ethereum are priced significantly higher in the country's exchanges than elsewhere in the world. For example, bitcoin traded at $17,169.65 per token at local exchange Bithumb, which was a 31 percent premium to the CoinDesk average price.