Bitcoin's Price Drop Triggers South Korea To Make Changes

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For those who invest in Bitcoin and other cryptocurrencies, the last two weeks have been worrying. Not only has the meteoric rise of the value stopped, but the worth also keeps sinking lower and lower.

There haven't been any one-day crashes like last week, but its value isn't climbing as fast as investors have hoped.

One the largest markets for Bitcoin is South Korea. To limit trade of Bitcoin, the country started implementing new rules as it grapples with its economic power.

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Bitcoin's tough week continues as prices for the cryptocurrency keep dropping. South Korea began weighing its options to restore calm in the community and keep it in check.

One of the options being considered by South Korea includes shutting down some of the exchanges to control the speculation.

South Korea's exchanges account for more than a fifth of global trading. Prime Minister Lee Nak-yeon is worried about the effects of bitcoin on the country's young people.

To regulate bitcoin in its market, South Korea implemented new regulations. These new regulations include ending anonymous trading, requiring those buying bitcoin to use their real names.

In addition, South Korea introduced legislation that could give regulators the power to close the exchanges, according to Reuters.

More Regulations

This isn't South Korea's first foray into regulating cryptocurrencies. Back in September, South Korea banned initial coin offerings (ICOs). This is a way to fund projects by creating and selling a new cryptocurrency.

Governments all over the world have been trying to rein in the speculation that came from new interest in cryptocurrencies. Like South Korea, China also banned ICOs, then it completely banned cryptocurrency trading.

One of the biggest worries is that cryptocurrencies can be used to fund illegal activities. Blockchain technology allows the transactions to remain encrypted and keep regulators away.

Governments lose control when they don't supervise the currency. Efforts to regulate it have proven difficult.

Regulations in the United States have been small. In 2014, the IRS ruled that bitcoin are assets, meaning that people who owned it would have to pay taxes, although exchanges in the United States have already run into problems with regulations. Coinbase refuses to disclose information of users who have traded more than $20,000 worth of bitcoin.

Most countries choose to issue warnings on the volatility of the cryptocurrencies, pointing out that there are no financial protections for those that invest in this market.

Shortly before the crash last week, Singapore issued a warning of "extreme caution" when buying cryptocurrencies.

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