South Korea reveals $600m in illegal trades but is not planning to ban cryptocurrencies

'No intention to ban or suppress cryptocurrency market'

South Korea's finance minister has confirmed that the country is not planning to ban cryptocurrency trading after all.

Over the past few weeks, there have been multiple reports claiming that the South Korean government has been drawing up plans to clamp down on cryptocurrencies.

But South Korean finance minister Kim Dong-yeon announced on Wednesday that the government won't ban the trading of Bitcoin and other digital currencies, according to Reuters.

South Korea has become a leading market for cryptocurrency mining and trading. However, government officials have previously slammed cryptocurrencies and indicated that they were mulling over a potential ban.

Kim said today, though, that while the South Korean government will continue to closely regulate cryptocurrencies, "there is no intention to ban or suppress cryptocurrency" market.

Many pundits had expected the country to follow in the footsteps of China, which has cracked down hard on cryptocurrency trading in recent weeks.

The apparent lenience towards the cryptocurrency markets is also a surprise given that the authorities in South Korea have also announced the discovery of illegal cryptocurrency trades to the value of $600 million.

"Customs service has been closely looking at illegal foreign exchange trading using cryptocurrency as part of the government's task force," said a government official.

Police and tax authorities in Asia have stepped up raids on cryptocurrency exchanges recently following allegations of tax evasion.

Cryptocurrencies are a lucrative investment opportunity around the world, and many see countries such as South Korea as an economic hub for currencies like Bitcoin.

Earlier this month South Korean justice minister Park Sang-ki said that the government was working on a bill that would effectively halt cryptocurrency trading in "domestic exchanges".

He said: "There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges," he said at a press conference.

Following this announcement South Korean cryptocurrency prices plunged by around 21 per cent.