Cryptocurrency market rattled on South Korea's plan to ban trading

Bitcoin dropped as much as 12 per cent to $12,801, Ripple fell 13 per cent and ethereum slumped 5 per cent

Bitcoin slumped as South Korea’s justice minister reiterated his proposal to ban local cryptocurrency exchanges, fueling concern that a government crackdown will erode one of the world’s biggest sources of demand for digital currencies.

The minister’s comments to reporters on Thursday were later downplayed by a spokesman for President Moon Jae-in, who said the proposal is one among several and that nothing has been finalized. Korea’s government unveiled multiple options for cryptocurrency exchange regulation on Dec. 28, including allowing trading to continue under tighter supervision.

Bitcoin dropped as much as 12 percent to $12,801, before paring its loss to about 7 percent