South Korean policymakers yesterday joined the global chorus of virtual-coin critics, saying Seoul is considering shutting down domestic virtual currency exchanges as the new breed of market exposes users to speculative frenzy and crime.
“[The government] is considering both shutting down all local virtual currency exchanges or just the ones who have been violating the law,” South Korean Financial Services Commission Chairman Yim Jong-yong said, responding to questions in parliament.
Separately, Bank of Korea Governor Lee Ju-yeol told a news conference that “cryptocurrency is not a legal currency and is not being used as such as of now.”
Bitcoin, the world’s most popular virtual currency, soared more than 1,700 percent last year, but prices have plummeted since South Korea last week announced that it could ban domestic cryptocurrency exchanges.
On Wednesday, bitcoin slid 18 percent. According to Bithumb, South Korea’s second-largest virtual currency exchange, the nation’s bitcoin trading price stood at 15,697,000 won (US$14,598) as of 12:14pm yesterday.
On the Luxembourg-based Bitstamp exchange, bitcoin was traded at US$11,750.
South Korean Office for Government Policy Coordination Minister Hong Nam-ki said that opinions on cryptocurrency trading are sharply divided within the government, but vowed to make a decision on regulations during yesterday’s parliamentary session.
South Korean Minister of Justice Park Sang-ki last week said the ministry was preparing a bill to ban cryptocurrency trading, sending bitcoin prices sharply lower and throwing the market into turmoil.
The shift toward tighter regulation sparked strong reaction from many South Koreans, thousands of whom signed a petition on the Web site of the presidential Blue House to stop a ban on cryptocurrency trading.
The central bank has begun looking into the market’s impact on the economy, Lee said yesterday.
“We have started looking at virtual currency from a long-term standpoint, as central banks could start issuing digital currencies in the future,” Lee said. “This sort of research has begun at the Bank of International Settlements and we are part of that research.”
Separately, Ledger SAS, a start-up that makes electronic wallets for bitcoin and other cryptocurrencies, has raised 61 million euros (US$74.5 million) from investors including Draper Esprit PLC.
“Everything blockchain depends on keeping the private key secure,” Ledger chief executive officer Eric Larcheveque said. “If you keep this private key on your computer, it’s like buying gold bars and storing them in plain sight on top of your chimney.”
The company, which makes USB dongles that contain a chip for safely storing and carrying around cryptocurrency passwords, is raising money to pay for hiring, research and development, as well as to finance its expansion.
With offices in Paris and San Francisco, Ledger targets selling 3 to 6 million of its hardware wallets this year, Larcheveque said, adding that it has so far sold about 1 million.
The start-up is profitable and had revenue of 46 million euros last year, split across the US, Europe and Asia, compared with 600,000 euros in 2016. It has raised 70 million euros in total, including this round, since it was founded in 2014.
Larcheveque declined to disclose the firm’s valuation.
Additional reporting by Bloomberg
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