Bitcoin tumbles as South Korea bans anonymous trading

The value of bitcoin has tumbled for the second consecutive week after the South Korean government announced a ban on anonymous cryptocurrency trading. 

Bitcoin prices fell from $11,000 (£7,900) per coin to around $10,179 (£7,300) following the announcement on Tuesday morning, The Daily Telegraph reports, halving in value since its all-time high last December. 

This led to mass sell-offs from South Korean investors, who fear the country’s crackdown “could damage demand”, the newspaper says.

The measures have been introduced to prevent children and criminals from trading the digital currency, the paper adds, even though the country “embraced” bitcoin during its recent price hike. 

According to ZDNet, South Korean investors will be allowed to trade bitcoin only if they link their bank account to an online trading platform. Those who do not verify their identification will have their exchange accounts banned, the site says. The new regulations come into effect on 30 January.

One of the driving forces behind cryptocurrencies is they “allow for entirely anonymous transactions”, The Independent says. This makes tokens such as bitcoin ideal for those concerned with internet privacy, but some use digital currencies to buy illegal drugs without being traced.

But the news site says the South Korean government’s crackdown could have been worse, as senior ministers “had suggested they might ban trading in bitcoin entirely”.