Mubasher: South Korea is planning to stop the trading of cryptocurrencies, the government said on Thursday.

The news sent bitcoin and other digital currencies into a plunge and putting the whole cryptocurrency market in a tailspin.

This comes after South Korean police and tax authorities raided several local exchanges on allegations of tax evasion.

South Korea is a major source of global cryptocurrency demand but the country has been struggling to regulate digital currencies, especially after their assets have surged over the last year but have been seeing an overall rise-and-fall over the past few months.

The country’s minister of justice Park Sang-ki said the government was in the process of preparing a bill to ban the trading of the virtual currency on domestic exchanges.

“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” Park said in a statement.

Following the government statement, investors sold various cryptocurrencies both local and offshore exchanges, resulting in up to $111 billion in losses of market capitalisations.

In 2017, bitcoin’s 1,500% jump attracted massive demand for cryptocurrencies in South Korea from college students to housewives and ignited fears of possible trading and gambling addictions.

The decision for the proposed ban came after “enough discussion” between relevant South Korean authorities including the finance ministry and financial regulators, Reuters reported citing a press official as saying.

However, once the bill is drafted, it will be subject to a 297-member vote in the South Korean National Assembly. The final verdict in the matter may take up months or even years.