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Forex News: Bitcoin Extends Sharp Slide On Regulation Worries

Bitcoin Extends Sharp Slide On Regulation Worries

01/17/2018 - 05:22:00 (RTTNews)

(RTTNews) - Bitcoin and other major cryptocurrencies extended their sharp fall from Tuesday into Wednesday morning on prevailing concerns of South Korea and China, the two leading crypto markets, planning severe crackdown on the digital currency market.

As of 2.03 am ET on Wednesday, the largest cryptocurrency by value and market capitalization, Bitcoin, was down 13.91 percent at $11,351.70, data from market data website CoinMarketCap showed . Its main rival, Ethereum, was lower by 17.08 percent at $1,013.24 and the third largest digital currency by market cap, Ripple, plunged 23.78 percent to trade at $1.20.

Among the top 50 crytpocurrencies on CoinMarketCap, Tether, a cryptocurrency backed by equal volume of actual fiat currency, and SmartCash, a community governance and privacy focused token, were the only gainers.

As of 2.23 am ET, Tether, which ranks 22nd on the website's list of top 50 cryptocurrencies, was up 1.69 percent at $1.03. SmartCash, which is at the 42nd position, rose 1.45 percent to trade at $1.10.

South Korea and China have led the group of countries that are planning to clampdown on the meteoric rise in the values of cryptocurrencies, alleging excessive speculation that could eventually end in the bursting of an asset bubble.

Governments are also concerned that these unregulated and decentralized currencies would facilitate money laundering and would be used to fund criminal activities such as drug-dealing and terrorism.

Tuesday's slide in cryptocurrencies was mainly triggered by comments from the South Korean finance minister Kim Dong-yeon, who said in an interview to a local radio that banning digital currency exchanges was "a live option."

The recent slide in the value of cryptocurrencies was triggered last week by South Korean justice minister's comments that the government was planning a legislation to ban cryptocurrency trading.

At the start of this week, however, the government sought to calm concerns saying that such a law would be decided only after several talks and consultations, suggesting it may not materialize in the near future.

On Tuesday, Prime Minister Lee Nak-yon said that shutting down cryptocurrency exchanges would require approval from the National Assembly, the Yonhap news agency reported.

In China, the People's Bank of China Vice Governor Pan Gongsheng sought a ban on centralized trading of virtual currencies and individuals and businessess facilitating such activities, Reuters reported Tuesday, citing an internal memo.

Shenzen Stock Exchange, one of China's two major stock bourses, issued a warning notice on Tuesday evening against the indiscriminate use of the term blockchain by businesses to boost their stock price.

In a message on its official WeChat account, the Shenzen exchange said it would punish companies that uses the buying of blockchain-linked stocks or makes false claims of developing blockchain business models to prop up their share price, reports said.

South Korea is also implementing new rules that will require real-name accounts for cryptocurrency transactions, starting January 20.

Korean tax authorities raided leading digital currency exchanges, Bithumb and Coinone, last week on concerns over tax evasion.

The number of accounts linked to cryptocurrency exchanges in South Korea totaled 111 with a combined deposit value estimated around 2 trillion won or $1.8 billion, Yonhap reported. More than 2 million Koreans own digital currencies.

The country has sought deeper co-operation with regulators in China and Japan in curbing intense speculation in cryptocurrencies.

For comments and feedback: contact editorial@rttnews.com

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