The growth of Bitcoin price on Monday was stopped by the news that South Korean regulators would check the bank accounts of the local cryptocurrency exchanges within the countermeasures for money laundering and terrorism financing.
Despite the loss of the sufficient part of the market as a result of the mass growth of altcoins, Bitcoin managed to grow in price during the first week of the new year. On Saturday, the rate increased to $17 762 (according to coinmarketcap.com), and this was the highest number in the last two weeks (from December, 21). Cryptocurrency increment made up $4000 from the beginning of the year.
- coinmarketcap.com data.
However, soon after reaching the level, Bitcoin plummeted to the minimum $14200/BTC (at the time of writing).
The fall is at least partially connected with the report, provided by the local media resource Yonhap, on the planned “intensive soundings” of the bank accounts, owned by the South Korean cryptocurrency exchanges.
The audits are held by the Financial Services Commission (FSC). They aim at checking whether the banks stick to the policy of money laundering opposition during the work with the local Bitcoin exchanges. Korean banks keep around 2 trillion of KRW or 1.8 billion USD that belong to the cryptocurrency exchanges.
Regulators strive to narrow down the inflow of the fiat currencies to the Korean exchanges and cool down the overheated cryptocurrency markets that often value coins and tokens significantly higher than the average world prices are.
Traders frankly worry that regulators would find something during their audit, and how they would react to the inappropriate accounts. Korean officials do not exclude the possibility of closing of the cryptocurrency exchanges in the future if they fail to yield to the regulators. The events are likely to cause a week of high turbulence on the market during which the traders will wait for the official statement.
The Korean uncertainty minimizes the significance of other announcements that could have provoked the growth of price. In particular, the New York Securities Exchange (NYSE) has applied for the adding of the Bitcoin Exchange-Traded Fund (ETF) to the listing of its trading platform Arca. It would strengthen the position of the cryptocurrencies as a primary class of assets.
The decision on the audit of the South Korean exchanges’ accounts touched not only Bitcoin but also altcoin market. All altcoins, together with the leading cryptocurrency, experienced the mass price fall, though some of them have already started to recover.