Cryptos Fall Following Raid On South Korean Exchange

Bitcoin — among other cryptocurrencies — took a fall on Friday (May 11) and hit a three-week low as news surfaced that authorities raided South Korea’s largest crypto-exchange, CNBC reported.

UPbit wrote on its website, according to a Google translation, that it “is currently under investigation by prosecution, and we are [cooperating] diligently. UPbit services, such as all transactions and withdrawals, are operating normally. Your assets are kept securely in your account.”

Though South Korean authorities raided the exchange due to concerns over fraud, the South Korean Financial Supervisory Service did not reply immediately to a request for comment by CNBC. According to CoinMarketCap, the exchange is the third-largest (with fees) in terms of trading volume, with the EOS-won pair representing the largest volume share.

Following the news, bitcoin dropped 5.5 percent to a little over $8,500. The price of bitcoin was $8,649.16 as of 12:50 pm on Friday (May 11), according to CoinDesk. By comparison, the cryptocurrency’s value was around $7,600 in February, a level that represented a new two-month low. That slide occurred as global concerns come to bear on the digital currency, tied primarily to bans on buying bitcoin levied by banks.

At the time, Lloyds Banking Group said that it would ban its clients from buying the marquee crypto (that would be bitcoin, of course) using credit cards, which comes on the heels of similar bans from Citigroup and JPMorgan. Banks have been banning such purchases with cards on the caution that they could be exposed to liabilities, as the currencies continue to show extreme volatility in trading.

Regulatory issues have also impacted the cryptocurrency realm. In one recent example, pressure came as India’s Finance Minister, Arun Jaitley, had said the country “does not recognize cryptocurrency as legal tender or coin, and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.”

As had been widely noted in mid-January, bitcoin breached a key $10,000 barrier, as news came that the South Korean government would tax income earned from virtual currency exchanges by as much as 24 percent.