South Korean government announces measures to clamp down on cryptocurrency rush. File Photo by Carlos Amarillo/Shutterstock
SEOUL, South Korea, Dec. 13 (UPI) -- South Korea may impose a tax on capital gains made on cryptocurrency as part of measures to rein in the frenzied trading in the country.
On Wednesday, the Office for Government Policy Coordination gathered top finance and IT officials to discuss emergency measures to curb speculation and crime in the cryptocurrency market.
The government plans to ban financial institutions from acquiring, possessing or investing in virtual currencies, as well as prohibit minors from opening accounts for trading, JoongAng Ilbo reported.
Cryptocurrency exchanges in the country will only be permitted if consumer protection measures are upheld and transactions are made transparent by disclosing all bid and offer quotes, as well as the names of traders.
In a bid to prevent crime, authorities will implement a crackdown on fraud and hacking attempts.
Also, a task force will be created to determine whether financial gains on cryptocurrency trading should be subject to tax.
South Korea is the world's third-largest market for bitcoin trading, after Japan and the United States, with local investors paying a premium of around 20 percent over global prices.
Bitcoin's value plunged some 40 percent over the weekend upon news that South Korea may roll out regulations, Maeil Business Daily reported.
However, the price recovered to $16,000 on Monday and wavered around $17,000 on Wednesday after the measures were announced, as they were deemed to be less stringent than expected.