Bitcoin dives double-digits as South Korea plans cryptocurrency ban

Bitcoin's value dived 13.5% on Thursday after South Korean officials revealed the nation was planning to ban trading of the cryptocurrency.

News of the ban came shortly after authorities raided several cryptocurrency exchanges over allegations of tax evasions, as South Korea, one of Bitcoin's biggest and earliest adopters, attempted to crackdown on the use of the coin.

"There are great concerns regarding virtual currencies and [the] justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges," justice minister Park Sang-ki said.

Bitcoin fell from $14,890 at 0000 GMT on Thursday to $13,745 as of 1400 GMT.

Once a bill had been drafted, legislation for an outright ban of all virtual coin trading within South Korea would then require a majority vote from the 297 members of the National Assembly, something that could take months or even years.

Neil Wilson, a senior market analyst at ETX Capital, said, "South Korea's curveball has blown Bitcoin back down, with BTC slumping as much as 14% before paring losses. Such swings are fairly commonplace, however, so it’s worth looking at whether this move by the South Korean government is simply another minor road bump to be sped over, or is something far more serious for the crypto boom."

"In short, the world's third-largest crypto market plans to ban all trading in Bitcoin etc. We’ve seen South Korea get more nervous about the amount of speculation but this 'nuclear option' was a little surprising, particularly as there were reports this week that South Korea was seeking to work with Japan and China on crypto trading rules," he added.