Bitcoin prices fell by 16 percent on Wednesday, hitting a low of $13,613, according to Coindesk. Price began to plunge after the South Korean government explore its options about bitcoin regulation, according to Bloomberg.
Some of the regulations also proposed a possible closure of cryptocurrency exchanges, causing a worldwide panic.
Previously, the South Korean government announced its plans to regulate cryptocurrency already due to the “bitcoin frenzy” ongoing within the state. At the time, the government was looking for a capital tax gains, approval for exchanges to operate, regulate trading, and who can open accounts.
In order to ensure protection for its citizens, the government enforced that exchanges must provide investor protection rules and disclose all information.
The unstable volatility has led many South Koreans to spend countless hours everyday on applications that monitor their cryptocurrencies, which eventually coined the term “bitcoin zombies.” South Korea alone accounts for 20 percent of global bitcoin transactions.
“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility,” the government said in a statement.
Continuing hacks from North Korea onto exchanges has also raised major concerns, which led to the proposition of potentially shutting down exchanges.
The government said it will review the closing of exchanges by announcing additional countermeasures to terminate virtual currency speculation by holding a ministerial meeting, according to Yonhap News.