The world may not be ending for digital currencies after all.
South Korea's Justice Minister Park Sang-ki said on Thursday that a bill is being prepared to ban all cryptocurrency trading on the country's exchanges, which drove digital currency prices sharply lower.The price of bitcoin tumbled more than 12 percent from its day's high following Park's remarks, according to Coinbase data. The cryptocurrency then rallied more than 7 percent off its low after Reuters reported South Korea's presidential office said the ban plan "had not yet been finalized" and is just one of the things being considered.
After the 7 percent comeback, bitcoin was down 5 percent Thursday, according to Coinbase.
The news agency added a ban bill "could take months or even years" to pass the country's legislative body.
Industry experts said fears over the South Korean ban proposal are overblown.
Cedric Jeanson, founder and CEO of BitSpread, one of the largest digital currency market makers in the world, downplayed the developments in the Asian country.
"It is understandable why the authorities are acting in Korea, which is different to other digital currency markets in several respects. Prices of digital currencies there are much higher than the rest of the world because of local circumstances," he said. "Developments like this should be seen in the broader context of the continued evolution and development of digital currencies globally."
Jeanson explained the authorities in Korea are making sure the country's digital currency exchanges have the "proper AML/KYC customer identification, and suitable cyber-security, tax reporting procedures and accounting."
"It is also natural to align the requirements of digital currency exchanges with the requirements of online financial platforms by regulators, as the trading nature of the activity is similar," he added.
South Korea is one of the major cryptocurrency trading markets. It accounts for between 6 and 12 percent of bitcoin trading, according to industry website CryptoCompare.
"In both China and South Korea, what they are doing, they are bringing operations, exchanges and mines, into regulatory compliance. They are not shutting everything down," Malachi Salcido, CEO of bitcoin mining company Salcido Enterprises said on CNBC's "Power Lunch" Thursday. "They are shutting people down [people] that are skirting the system ... tax evading. The things they should be doing. The industry is growing up."
Digital currency fund manager Brian Kelly predicts South Korea's moves will just be another bump in the road for the relentless rise of cryptocurrencies.
"The ultimate outcome in Korea is still unclear, but if they move to regulate similar to Japan then it would be very positive for crypto," Kelly wrote in an email. "The change in the market over the last few months is that the incremental buyer is US investors and Korea has become less of a driver."
Ripple's cryptocurrency XRP also surged off its low as much as 15 percent after it announced it is teaming up with U.S. money transfer giant MoneyGram. XRP is up 3 percent Thursday, according to CoinMarketCap.
â CNBC's Jeff Cox and Arjun Kharpal contributed to this report.
Zedd, 3LAU and Big Sean: Tickets On Sale for First Blockchain Music Festival
Tickets for the first music festival set to be powered by blockchain technology are now on sale.
Scheduled for this fall, the Our Music Festival is launching its own virtual currency — the OMF toke
How Crypto Reacted to This Week's SEC Bitcoin ETF Delay
It was an expected result at an unexpected time.
The news broke on August 7 that the U.S. Securities and Exchange Commission (SEC) is kicking the can on its decision to approve or disapprove a prop
Microsoft Looks to Trusted Computing for Blockchain Security Boost
Two newly published patent applications from Microsoft suggest that the software giant is looking at the use of trusted execution environments, or TEEs, within its blockchain offerings.
Crypto Millionaire Lost 5,500 Bitcoins in Alleged Investment Scam
A 22-year-old cryptocurrency millionaire has lost more than 5,500 bitcoins in an alleged investment scam in Thailand – one that drew public attention due to the involvement of a local actor.
China's Communist Party Publishes Blockchain Tech 101
China's Communist Party is moving to make blockchain literacy the norm across public offices with the publication of an explainer for officials and members.
Released by the publishing house of the
Blockchain Social Network Minds Is Migrating to Ethereum for Launch
Blockchain-based social network Minds is migrating its platform to the ethereum network, the startup announced Monday.
After roughly four-and-a-half months on its Rinkeby test network, the startup
Bitcoin Trading Is Illegal in Saudi Arabia, Warn Watchdogs
A governmental committee comprised of Saudi Arabian regulators has issued a statement clarifying that cryptocurrency trading is illegal in the kingdom.
According to a statement issued Sunday, the s
Former S&P President Leads Seed Round for ICO Compliance Startup
Regtech and compliance startup iComply has just completed a seed funding round led by former Standard and Poor's president Deven Sharma.
The firm – which seeks to develop standard compliance tools