Bitcoin price latest: South Korea softens stance on cryptocurrencies, saying ban is 'just one option'

Price of bitcoin dropped sharply on Thursday after justice minister Park Sang-ki said the country planned to shut down digital currency exchanges

One week ago each Bitcoin value passed £7,400 for the first time ($10,000), a couple of hours ago it reached £10,500 ($14,000) - and it's still rising. (Reuters)

South Korea appeared to soften its stance on cryptocurrencies on Friday, rowing back on justice minister Park Sang-ki's comments indicating that the government planned to ban trading in the assets.

A shutdown of cryptocurrency exchanges was just “one of the measures prepared by the Ministry of Justice, but it’s not a measure that has been finalised,” a spokesperson for the South Korean Presidential Office said, according to local media.

The price of bitcoin dropped sharply on Thursday after Mr Park suggested that South Korea planned to ban cryptocurrency trading in the country.

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The move came after police and tax authorities reportedly raided local exchanges this week over alleged tax evasion.

The digital currency fell more than 10 per cent in the early hours of Thursday morning UK time, before paring some of its losses.

South Korea has been one of the keenest adopters of bitcoin but the country’s justice minister, Park Sang-ki, said in a press conference on Thursday that the government had “great concerns” about digital currencies, Reuters reported.

Bitcoin rallied to a high close to $19,800 on December 16 before falling 28 percent, driven by a new generation of investors that can now bet on and against Bitcoin prices with futures contracts. Graphic shows changes in bitcoin value from December 1, 2017 to January 10, 2018. (Graphic News)

The justice ministry is “basically preparing a bill to ban cryptocurrency trading through exchanges,” Mr Park said.

Any legislation imposing a ban would be subject to a majority vote of the 297-member National Assembly.

The news comes after the South Korean government banned cryptocurrency exchanges from opening new customer accounts in December as it attempted to rein in speculation which has seen prices swing wildly in recent months.

Politicians and central bankers around the world have warned that bitcoin and other digital currencies are extremely risky investments that have the potential to crash.

Until now, authorities have largely stopped short of direct intervention, but increasing fears about scams, money laundering and hacks linked to cryptocurrencies, could attract further attention and mean more crackdowns in future.