South Korean New Regulations on Crypto Currency Could Be a Blow for the Cryptocurrency Market

The world’s third largest market for cryptocurrencies, South Korea, after the U.S. and Japan will suffer after the South Korean government announced new legislation on Thursday, that it is prohibiting cryptocurrency exchanges from issuing new trading accounts.

The news hit cryptocurrency prices. Various crypto prices dropped, with Bitcoin taking a hit of 12% and Ethereum slamming 8%.

Since much of the cryptocurrency trading was being done anonymously, users must now use their real names and anonymous trading is no longer allowed.

The proposed legislation on anonymous accounts is in line with recommendations from the Korea Blockchain Industry Association earlier this month which declared that currency operations between Korean Won and cryptocurrency-denominated accounts should only be allowed in cases where the identity of the account holder has been confirmed.

The craze of cryptocurrency has taken the country’s ruling body by surprise and the government is trying to regulate the market with laws and order. Recently, the government also announced that it intended to tax cryptocurrency gains as capital gains in an attempt to stem the onslaught of cash coming in from Korean consumer investors.

Despite great popularity among the Korean public, there have been increasing concerns that Korea’s exchanges are insecure. Last week, one of the most prominent Korean cryptocurrency exchanges, Youbit, collapsed following a $35 million hack earlier this month. That was after a $72 million hack on the exchange in April.

The new laws will surely make it tough for cryptocurrency markets and prevent the North Korean Infiltration into the south market much tougher.