Bitcoin mania sweeps South Korea

South Korea is usually clamping down on its bitcoin boom.

The country’s government said Thursday This kind of was putting in place measures to cool speculation within the red-hot cryptocurrency, which has surged by more than 1,300% in 2017.

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The measures include a ban on opening anonymous virtual currency accounts along with brand new laws giving authorities the power to shut down digital currency exchanges.

Related: What is usually bitcoin?

South Korea, a global hub for bitcoin trading, has previously said This kind of wants to tax profits through trading in virtual currencies.

“The government has repeatedly warned that will virtual currencies are not legal currency, that will prices can fluctuate drastically along with cause great losses,” Thursday’s statement read.

Bitcoin’s value dropped soon after the announcement. The virtual currency plunged more than 10% to below $14,000 on Thursday morning in Asia, according to CoinDesk.com, along with continued to fluctuate through the day.

Mati Greenspan, a Tel Aviv-based analyst at investment firm eToro, said This kind of could be too early to gauge the impact of the rules, although they sounded “ominous.”

“If they start shutting down exchanges, This kind of won’t kill bitcoin or affect its desirability… although This kind of could seriously hamper the flow of funds,” he added.

Related: Bitcoin: What’s driving the frenzy?

South Korea has become an early mover in trying to regulate cryptocurrencies like bitcoin, which have largely fallen outside the grasp of governments along with central banks.

The country has become a hotbed of bitcoin activity, often accounting for about 20% of daily worldwide trading within the cryptocurrency.

Bitcoin is usually in such high demand that will South Korean traders can end up paying a premium of between 15% along with 20% compared with prices elsewhere.

The country is usually also home to Bithumb, one of the globe’s biggest bitcoin exchanges.

additional governments have differed in their approaches to virtual currencies. China has taken a hard line on bitcoin exchanges, whereas Japan earlier in 2017 recognized bitcoin as a legal currency.

Related: I bought $250 in bitcoin. Here’s what I learned

South Korea is usually all too familiar with the potential perils of digital currencies.

Earlier in December, another bitcoin exchange within the country said This kind of had gone out of business after being hacked for the second time in less than a year.

Seoul-based Youbit said This kind of was filing for bankruptcy after hackers stole nearly a fifth of its clients’ holdings.

– Jake Kwon contributed to This kind of report.

sy88pgw (Hong Kong) First published December 28, 2017: 2:25 AM ET