Bitcoin plummets after South Korea signals trading clampdown

Bitcoin plunged on Thursday after South Korea pledged to ban crypto-currencies in a sign of increasing regulatory scrutiny of the financial phenomenon.

A number of crypto-currency exchanges were also raided in the South Korean capital of Seoul overnight amid allegations of tax evasion.

Bitcoin at one point fell 8% to $13,699.19 after pre-Christmas highs when it threatened to breach the $20,000 mark.

South Korea has become a hub for crypto-currency with more than a dozen exchanges operating in Seoul.

Some of the biggest, like Coinone and Bithumb, were raided by police and tax authorities. The government is preparing a draft bill to put before the National Assembly to ban the exchanges.

“There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban crypto-currency trading through exchanges,” South Korea justice minister Park Sang-ki said.

Bitcoin prices surged more than 1000% last year as retail investors piled into the speculative currency, which is created by harnessing computer-processing power.

Investment guru Warren Buffett became the latest to weigh in on the topic yesterday when he said he expected a “bad ending” for bitcoin.